Running a successful business takes more than passion and hard work. Consider the importance of building the must-haves for a successful business 101. But what about the legal side of things? For too many entrepreneurs, creating a legally successful business matters, but it often gets pushed aside until there’s a problem. However, by establishing the right legal foundation early, you set your business up for long-term success. Here are four legal musts every woman business owner should have on her radar.
Choose the Right Business Structure
Your business structure isn’t just a formality; it determines how you’re taxed, how you get paid, and whether your personal assets are protected. If you haven’t already formed an LLC or corporation, now is the time to explore your options.
A sole proprietorship might seem easiest in the beginning, but it offers zero liability protection. That means if your business is sued, your personal assets could be on the line. Forming an LLC (Limited Liability Company) separates you legally from your business, which can protect you and boost your credibility.
Put It in Writing
Every agreement in your business, whether with a client, contractor, or supplier, should be clearly written in a contract. A contract outlines expectations, timelines, payment terms, and what happens if things go wrong. That said, it is important not to put every conversation in writing. Agreements need to be contractual, but everything else may not have a legal weight.
Without a contract, you are at risk of misunderstandings or even not receiving what you thought was promised. You may find yourself tied up in litigation over a “handshake deal” that went sideways. Working with a legal professional to create solid, reusable templates for your contracts helps ensure you’re protected from the start.
Basics of Employment Law
Hiring your first employee or contractor is exciting. But remember that it comes with responsibility. Many small business owners don’t realize that misclassifying a worker or skipping paperwork can lead to fines or even lawsuits.
Before you hire, make sure you understand the difference between employees and independent contractors. Employees typically require tax withholding, regular paychecks, and benefits. Contractors have more independence, but they should also sign an agreement outlining the scope of work, ownership of materials, and deadlines. You should also include NDAs or IP protection clauses when appropriate.
Safeguard Your Intellectual Property
Your brand name, logo, website content, and course materials are all valuable assets. But unless you take steps to protect them, others can use or even steal them without warning. Consider trademarking your business name and logo to protect your brand identity. If you’ve created unique written content, videos, or digital products, copyrighting them gives you added protection. While the process may seem intimidating, a good attorney can help you file the right applications and enforce your rights if someone infringes on them.
Final Thoughts
You don’t need to be a legal expert to run a legally successful business. But you need to make sure you address all necessary legal aspects of running a business. There’s no need to go through each step by yourself, as you can reach out to professionals for guidance and support. However, you will need to be aware of those legal aspects, even if you don’t know how to enforce them. Ignorance of the law is, unfortunately, not an excuse to avoid legal consequences.