There’s a lot to think about when you’re starting a business. You need to create a business plan, get a small business loan, raise enough capital, figure out all of your processes, and so much more. While you’re getting all of your ducks in a row, you need to make sure you are following all of the laws so you don’t run into any legal trouble in the future. Here are a few legal tips to consider for launching a successful company.
1. Budget Enough Time and Money
Eyal Lifshitz, founder and CEO of BlueVine, recommends budgeting extra time and money for legal work. He explains that legal fees can be a large upfront investment when you get started with your business and there may be more back and forth than you expect. The cost of getting everything set up can cost quite a bit, and you have to make sure you have all of the necessary permits and licenses, which may require an attorney to review or file. Lifshitz says that you should ask for an estimate of the legal costs and for the amount of time it will take to get started so you can come up with a modified plan if necessary.
2. Choose a Legal Structure
Before launching your business, you need to choose a legal structure. The different types of structures have different tax and legal implications, so you need to choose the right one for your business. The Small Business Administration lays out the definitions and all the information you need about sole proprietorships, limited liability companies (LLCs), cooperatives, corporations, partnerships, and S corporations.
3. Know How to Hire Employees
There is a lot of red tape that comes with hiring employees. Nolo.com lays out some of the most important steps, including:
- Obtaining an Employer Identification Number (EIN)
- Registering with the labor department in your state
- Setting up workers’ comp
- Establishing payroll and taxes
- Having employees fill out tax forms
- Notifying the new hire reporting agency in your state
- Displaying the required notices
Make sure you fill out all of the necessary paperwork and tax forms, and notify all government agencies as required. You need to ensure you are following all laws and protecting your business from lawsuits.
4. Create a Safe Work Environment
It is your duty as an employer to create a secure working environment. Your employees need to be properly trained to do their jobs in a safe manner and have any personal protective equipment (PPE) required. You also need to make sure your location is safe and doesn’t expose your employees to any unnecessary risks. You may want to have an industry-specific lawyer or someone from the Occupational Safety and Health Administration (OSHA) come out to do an inspection for potential hazards to make sure you are fulfilling your legal obligations.
5. Pay Your Taxes
Another legal area you need to be aware of is taxes. You need to know both your federal and state tax obligations for your business entity, which is why it is so important to choose the right legal structure for your business. Some of the taxes you need to pay include income tax, estimated tax, employer tax and excise tax. Before you hire any employees, you need to register for an EIN (mentioned above) and get your finances straight. You may want to hire an accountant or someone to help you with your finances, and you can check the SBA or IRS websites for more help.
You want to launch a successful company, and that means you need to legally protect yourself and your employees. Before you start selling your products or services, speak to a lawyer about your company and industry to make sure you are compliant with all laws. Industry-specific lawyers can also help you protect your intellectual property and copyright. These measures are worth the time and money to make sure your business is protected.
This is a guest post by Sara Parker, an experienced writer and editor. Sara has made her career in content and social media marketing.
