Whether you’re a Baby Boomer launching a second career or a Millennial looking to make millions by striking out on your own, there are some basic legal guidelines for entrepreneurs who are considering launching their own businesses.
Here are the Top 10:
- Choose the right business entity. Many entrepreneurs will launch their new ventures as a sole proprietorship without realizing this entity provides no protection for their personal assets from potential business debts or liabilities. For personal asset protection, choose an LLC or corporation, which also provide tax advantages as well.
- Buy business insurance. You don’t have to have a risky business model to need business insurance. Even consultants get sued by clients who act on their advice and then don’t like the outcome.
- Partnerships necessitate a buy-sell agreement. A buy-sell agreement enables partners to plan for how partnership shares are bought, sold or transferred if a partner dies, becomes disabled, or just wants to leave.
- Get everything in writing. While verbal agreements have been known to hold up in court, it’s much better — and less expensive if litigation looms — to have all agreements in writing.
- Understand employment laws. Many new companies hire independent contractors during the startup phase. If this is something you plan to do, be sure you understand employment law regarding independent contractors vs. employees so as not to run afoul of the IRS.
- Follow corporate formalities. If you have incorporated as an LLC or corporation, there are certain corporate formalities that must be followed in order to maintain your limited liability protection. Your legal counsel can ensure you stay on track.
- Consider IP. You not only need to be sure your own intellectual property — your name, logo, products or services — are properly protected in the markets you serve, you also need to ensure that you don’t infringe on anyone else’s IP.
- Develop employment agreements. Having the proper legal agreements in place — including confidentiality, non-compete and non-disclosure agreements — can help ensure that your employees or independent contractors don’t leave and take your customers or ideas with them.
- Have legal disclaimers on your websites. Each website you develop for your company must include Privacy Terms and Terms of Use that outline the rights and responsibilities of each party.
- Get professional guidance. Good legal and financial advice is invaluable for every new business. A good business lawyer can help identify problems down the road that could have a disastrous effect on your business.
Johnson Legal PC founder Adrian Johnson, Esq., worked on Wall Street for many years, where he bought and sold over 100 companies. He has built his law firm with experience and technological savvy to ensure clients have 24/7 access for their business legal needs. Contact us to learn more about how a great corporate attorney can help your business thrive.
