What are the Legal Issues Involved in Starting a Business?

Starting a business is an exciting prospect. Doing everything right from the very start, like having the correct amount of capital needed, is the best way to set you and your business up for success. Legally there are steps that you have to take and steps you should take to protect you and your company. Securing the services of a consultant to walk you through this process is ideal but not always realistic. You may be able to get some affordable advice from a business attorney if you shop around. It is worthwhile to get a basic rundown from a legal professional that understands your mission.

First Steps

The first legal step you must take is deciding what kind of structure your business will have. Will you be an LLC, Partnership, Corporation, or Proprietorship, to name a few? Each business structure comes with its own tax liabilities. You must understand the tax implications of each decision. A consultation with an accountant is a must. Certain kinds of business structures have different kinds of formal regulations that you must follow. If your structure calls for annual reports to all investors, that is not something you can skip over. You must have a full and clear understanding of the requirements of each structure so you can ensure you are meeting them.

The second step you need to take is to establish impeccable record keeping standards. The whole point of this is to avoid legal issues regarding your company. When you have clear and concise records you can show any government agency that you have the records on file that are required to run a company.

Obtaining Permits

Obtaining the proper permits is a vital part of your business foundation. If you are lacking the right permits, you could be headed for big trouble. You will need to understand your legal obligations when it comes to licensing. If you are a certain kind of business that might affect the environment, you might need special clearance from state and federal agencies. You have to look at state, and federal permits and licensing to ensure you are ready to open your doors. Often, a visit to your local courthouse will give you valuable information regarding forms and fees you will need to take care of.

As a new company you need a plan to accept payments for your services. For example, if you are opening a loan company you will likely need an escrow account along with other accounts to handle your money. In order to open accounts with any financial services company you need an IRS identification number. You will have to file paperwork with the IRS to obtain this. Once you have it, you can officially open accounts and get ready to process payments of all kinds.

Have you checked the zoning laws in your county? Is your kind of business allowed in the neighborhood in which you wish to work? One call to the zoning board in your municipality will tell you all you need to know. This is really only applicable if you are trying to start a business in your home, but a quick check is recommended for everyone.

In your quest to start a business it is so important to start off on the right legal foot. When you use an organized strategy you don't have to worry about extra surprises coming up. When you know from the start what is expected of you, you won't have to wonder if there any new business legal issues involved. You know the answer is yes and with some research you will know what you have to do.

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