Back to Back Issues Page
Time to Deal With the Legal Matters
February 16, 2015

I hope you did your research last week. You should now know what your business model is, who your customers are, and how you will serve them. Now it's time to deal with the legal matters.

I am not a lawyer and I will not offer legal advice. But there are many legal issues that need to be decided before you proceed any further. I encourage you to find an experienced business lawyer and consult with him before making any decisions. Or you may wish to use a service such as LegalZoom.

It is critical that you protect your business legally right from the start. You do not want to find yourself in a legal battle months or even years from now that could have been prevented with a simple trip to a lawyer. If you can't afford a lawyer then at least do some research on basic business legal issues.

One of the first decisions you need to make is what kind of legal form will your business take. This decision can impact everything from how much you pay in taxes to who is liable in the event of a lawsuit.

There are several legal structures you can consider. Your attorney can help you choose the best one for your business.

1. Sole proprietorship: This is a business owned by one person with no formal legal structure. Advantage - it's simple. However, you have no personal liability protection if your business is sued.

2. Partnership: A partnership is a business with more than one active owner. While there are no legal forms required for a partnership, each partner can still be held liable for the actions of the other partners.

3. Limited Liability Company: This form provides liability protection for all partners without requiring incorporation. LLC laws vary by state so be sure you research this thoroughly if you are not using a lawyer.

4. Corporation: There are different types of corporations such as "S" corporations or "C" corporations. I highly recommend you contact an attorney if you wish to incorporate.

Once you have chosen your business structure, you will need to apply for any licenses, permits, and identification numbers necessary. For example, you will need a federal tax ID number. Your state may also require an ID number. You may also need to obtain state, county, and city licenses or permits.

Depending on the type of business, you may also want to obtain trademarks, copyrights, or even patents to protect your business and your property. Again, I cannot stress strongly enough the advantages of consulting an attorney at this point.

We grow by word-of-mouth so please feel free to forward this newsletter to anyone whom you think might benefit from and enjoy it. Thanks so much! As always, feel free to share your comments and questions. And we love knowing whether you found this useful. Contact us via email. Want a copy of your very own? Click here!
Back to Back Issues Page