Here's a basic list of seven legal issues every business should be sure to consider.
1. Corporate Organization: Form and State of Organization
As a business owner, you want to minimize your liability. To shield your personal assets from being subject to the company’s creditors (for example, if the company takes out debt or is the subject of a lawsuit), you may choose to incorporate or form an LLC. If business doesn’t go quite as planned, the so-called “corporate veil” can help insulate you and your personal assets. A lawyer can also help you choose which corporate form (S-Corporation, C-Corporation, LLC, LLP, PLLC, etc.) and state of formation will be most appropriate for you.
For your business to thrive out in the world, you should make sure that everything is clear and settled on the homefront. What this means is that you should formalize agreements with your co-founders, other principals and any investors. By memorializing business processes and agreeing on what happens if one of the cofounders or principals has to leave the business for any reason, you can save yourself a lot of time, money, headache and drama in the long-run.
3. Intellectual Property: Trademarks, Copyrights, and Patents, Oh My!
Your intellectual property is at the very core of your business, so protecting it is of the utmost importance. A trademark protects your business’s brand--including your logo, your name, slogan and product names. You need to perform due diligence to ensure you will not be infringing on anyone else’s intellectual property, and then register a federal trademark or trademarks. Copyrights protect original works--of art, writing, or software code, to name a few. You may need to file for copyright protection or license copyrights for your business. Patents protect inventions, including “business methods.” You should talk to an attorney to figure out whether you need to file for a patent. The right attorney can streamline what can be a lengthy filing process and manage the important steps and details of the intellectual property protection process.
4. Real Estate: Location, Location, Location!
Whether it’s a storefront or other commercial space, you need a lawyer to negotiate your sale or lease to secure a great deal for your business and make sure there’s nothing in the lease that could cause your business problems.
Certain types of products (e.g., medical, alcohol, food, insurance, etc.) and certain types of transactions (e.g., securities, international, banking, etc.) are heavily regulated by state and federal rules. An attorney can help evaluate whether your business falls into one of these categories and strategize about how to handle compliance, before you run into any difficulties.
If you have any employees or contractors, you must comply with federal and state employment laws. At a bare minimum, you will need a contract between you and your employee or independent contractor and an employee handbook of company policies. You might also need an attorney to help you ascertain whether a contractor is actually an employee, whether employees are exempt or not, and to safeguard your company’s confidential information.
7. Tax Concerns
You may need advice on how best to structure your company to minimize your tax obligations and on what tax requirements your business must meet, including whether your business is required to pay sales tax (especially in light of recent changes)!