Having a great product or service is a critical component of starting a profitable business, but it isn’t the only one. There are many legal issues that you as a business owner must consider before you can start interacting with customers. As you go about these decisions, it is wise to seek out the advice of other successful entrepreneurs, such as David Walsh Bronxville.
The Planning Stage
One of the very first things you will need to consider is what your company’s legal structure will be. If you are starting out small, there are two main options to look into:
- Sole Proprietorship: This structure gives you a lot of control and minimizes the amount of taxes you owe. On the other hand, any debts your company incurs are also your personal responsibility.
- Limited Liability Company: LLCs are similar to sole proprietorships in the way you pay taxes, but they also allow you to have as many shareholders as you want; however, this structure is temporary. S Corporations have much in common with LLCs but are more permanent.
If you expect your company to be larger or to include more people, you may wish to consider a couple of different structural options:
- Partnership: A partnership gives general partners a lot of say-so within the business but also makes them personally responsible for taxes and debts. Unfortunately, having more people involved adds a lot of legal complications and fees.
- Corporation: If you are going to go big, a corporation may be the way to go because it minimizes your personal liability and enables you to sell shares in your business. The downside is that you will pay much more in taxes and legal fees.
ALSO READ: How To Financially Manage Your Investment
The Preparation Stage
Once you have decided on a business structure, you must consider zoning and licensing laws. These may vary widely with the type of product or service you offer, as well as what sort of premises you require. Make sure you have a business license to start with, then you can address more specific legal issues from there.
Opening Your Doors
Before you can officially open for business, it is essential that you consider what sort of liabilities your business may face. There are many types of insurance policies you may want to purchase, starting with employer’s liability insurance. Additionally, be sure to reach official agreements about confidentiality with other organizations that may have inside information about your business’s operations.
Clearly, starting a business is no simple matter. Be sure to seek advice from other business owners, as well as people with expertise in accounting and law. With the right team behind you, your start-up can be a huge success.