Owning a small business obviously will be simpler than having a huge corporation. However, there are still some things you need to do to legally protect your small business. The following tasks are not difficult and do not normally cost loads of money to carry out. I recommend that all new business owners consult with an accountant and an attorney to get information about the local laws and procedures for startups. In the meantime, here are some legal steps to help you get started.
Decide on and Register your Business Name
Your business name is essentially the first thing your audience sees, hears, and identifies with. It’s your connection to the world and your potential buyers. Once you decide on a name, it’s important to make sure that it is legally clear to use in your country and state. There are websites that help you do business name and trademark searches or you can consult with an attorney. A quick search on Google can also help you know if anyone is using a particular name.
Once you clear the name for use, it’s important to get it and any tagline trademarked so no one else can use it. If you form an LLC then this will automatically register your business name with your state, if you live in America.
Consider a Legal Business Structure
Liability protection is huge if you run a small business. If you don’t formally apply for any kind of business structure, your business will become a sole proprietorship or a general partnership. This means you are personally liable for everything that happens in the business, including lawsuits or accidents.
Sole proprietorships have fewer compliance requirements, but at the end of the day, they don’t give you the same liability protection when compared to other personal assets. If you form an LLC, this basically establishes your business as an entity that is completely separate from you as an owner. Do consider getting advice about what type of business structure would serve you the best.
Obtain the Appropriate Licenses and Permits
Some types of businesses require state or federal licensing or local permits. Business requirements do vary from state to state, or from country to country, so take nothing for granted. It may be that you need to get a food or beverage license, a health license or even a tax license. Contact your local small business administration for updated information. If you are hiring staff, such as contractors or even an expert who works in the same industry then look into the AABC Commissioning Group.
Guard Your Confidential Information
If you know you will be working with a sub-contractor or even a project partner, protect your small business information with contracts and or a non-disclosure agreement (NDA). These documents help secure the safety of your information and the future of your company. An NDA normally specifies a timeframe during which others cannot disclose or use information from your company. Normally they go to a maximum of around 5 years, so look into this before you fully settle on your decision. This is one of the best ways to legally protect your business.