Starting a new business is an exhilarating journey with many decisions to be made along the way. For your convenience, this blog post outlines some considerations that new business owners need to address. Additionally, we invite you to contact a Rochester corporate lawyer from Lacy Katzen LLP, we are happy to advise and assist business owners.
10 Key Considerations for Starting a Business
- Choosing the Right Business Structure: This decision influences your personal liability, tax obligations, ability to attract investors, business succession planning, and operations. Sole proprietorships and partnerships can be the easiest to start up but expose owners to personal liability. Limited Liability Companies (LLCs) and corporations provide liability protection but require strict adherence to legal and tax structures. Your choice should align with your business goals, financial situation, risk tolerance, and succession plan.
- Business Name and Intellectual Property: Your business name is its identity. That is why you need to choose a name that reflects your brand and is legally available. Conduct thorough searches to avoid infringing on existing trademarks. Filing your business name and potentially registering it, secure your brand and distinguish your company from others. Your business may have products, designs, and other assets that need to be protected to secure their value and protect them from infringement by third parties. You may need to utilize intellectual property laws and tools to protect these assets.
- Employer Identification Number (EIN): An EIN is applied for when entities are formed to operate a business. It is how a state, and the IRS identifies your business for tax and other related purposes.
- Licenses and Permits: Depending on your business type and location, various licenses and permits are required to legally operate. These can range from general business licenses to specific permits for regulated industries. Failure to obtain the necessary permissions can result in fines and business interruptions.
- Zoning Laws Compliance: Before setting up your physical location, ensure it complies with local zoning laws. These laws determine what types of businesses can operate in certain areas. Non-compliance can lead to fines and the need to relocate your business, incurring additional expenses.
- Understanding Tax Obligations: Taxes can be complex, varying by business structure and location. Familiarize yourself with federal, state, and local tax requirements. Consider consulting a tax professional to navigate these obligations efficiently and take advantage of potential tax benefits.
- Adhering to Employment Laws: If you plan to hire employees, understanding employment laws is crucial. This includes minimum wage, overtime pay, workplace safety, and nondiscrimination laws. Ensuring fair treatment and a safe environment for your employees can prevent legal disputes and enhance your reputation as an employer.
- Drafting and Understanding Contracts: Contracts are the foundation of business transactions. They should clearly outline the rights and obligations of all parties involved. Well-drafted contracts can prevent misunderstandings and provide a legal basis for resolving disputes.
- Insurance for Protection: Insurance mitigates risks associated with unexpected events. Liability insurance, property insurance, and worker’s compensation are common types that can protect your business from significant financial losses.
- Data Protection Compliance: In our digital age, protecting customer data is not only ethical but also legally required in many jurisdictions.
If you have questions about starting a business or would like to speak with one of our corporate lawyers about the needs of your existing business, please don’t hesitate to contact Matt Ryan, Jen Chadwick, Craig Welch, or Ryan Hayes at Lacy Katzen LLP.
