Starting your own business, whether big or small, is like a gamble. Generally, the risk is high and there is no assurance of how much ROI you could earn in a certain period. So, should you just stay being a regular employee and dump out your ultimate goals?
The major difference between a business-minded person and a regular individual is how they visualize the future. Businessmen always believe in positive visions and look forward to their success. But what you need to know as a starter is that this is not an overnight undertaking. There are many meticulous processes you need to go through in order to build your dream business.
An organization that has a strong foundation is ready for growth even before it officially enters the market competition. Above all, legality and profitability must be both on point for all the efforts to pay off.
Here are the things you need to ask a lawyer when starting a business:
How Can I Protect My Company, My Employees, Clients, and Consumers?
As they say, nobody is perfect. No business is perfect as well, especially those big manufacturing corporations out there. Events known as intentional and accidental negligence could affect the whole wealth and credibility of your business. Yes, insurances are available to protect against future damages but you should be wary of how far civil suits could go.
A company, no matter how automated, is composed of people. Employees as the backbone and customers as the lifeblood of your organization. You have to make sure that their safety as an individual is implemented within your area of operation. Whether you sell products or offer services, nobody should be harmed at all costs.
Schmidt & Clark has a complex experience of presenting the rights of individuals and families. For the past decades, almost every claim in the civil court falls under tort law. Therefore, if you want to run a business that can be proud of its integrity. Your operations must never constitute a tortious act.
What Should Be My Business Structure?
Your business structure will depend on your business plan. Are you going to provide goods or services? Do you need to hire employees or can you manage it on your own? What kind of resources do you have?
Gathering this information will help your lawyer to identify the business structure that is perfect for you.
Below are some of the options you can consider when creating your business for the first time:
Most business starters begin their entrepreneurial endeavors as Sole Proprietors. If there are no other specific laws applied, you will operate under your SSN or Social Security Number. There is also an option to apply for a Tax Identification Number or TIN for your business.
Limited Liability Company
This type of business structure was created to support independent business owners. It is known by many businessmen for its simplicity, yet binding and potent legal protections. It shields your personal assets against certain claims. You may want to compare this to Sole Proprietorship and let your lawyer help with the assessment.
Forming a corporation is not simple. Hence, this business structure is a legal entity that has a separate identity from its owners. A corporation is like an individual which possesses the same rights and obligations as a person. You definitely need to ask the assistance of a business consultant and a lawyer to gain more legal knowledge about the process of incorporation.
How to Choose and Register A Business Name?
We have to be honest here. The first thing that you come up with is the name of your future business. Well, you have to have a lot of backup names and be willing to change it, sometimes at the last minute, if you want to proceed accordingly.
A Sole Proprietor will have to register a business name in “Doing Business As” (DBA) or in “Fictitious Business Name” (FBN). Don’t think that this process is irrelevant. This will help your state or local government to know that you are operating under this business name. Don’t misinterpret this with trademark protection because it is another thing you have to specify under the law.
On the other hand, LLC and Corporations have their own governing organization. Be mindful that whatever business industry you’re in, you have to make sure that a name is filed properly under your name.
Should I Get a TIN/EIN?
Many numbers are going on here namely SSN, TIN, and EIN. All of them are used by the government to monitor your earnings. The first two kinds are already discussed a bit earlier. Now, let us define EIN also known as the Employer Identification Number. If you are registered under Sole Proprietorship or a single-member LLC, you don’t need to obtain an EIN. You are not required but you are allowed, especially if you are planning to fully separate business liability from personal liability.
What Business Permits, Licenses, and Taxes Do I Need to Settle?
Again, it depends on your industry. Initially, state licensing and permits vary from the business niche itself and the location. Each of them is supervised and regulated by specific institutions. Once permits and licenses are obtained, you can legally operate as a business.
When it comes to taxes, it is also important to understand all the tax requirements that you need to settle in the future. Income tax is not the only tax in the business world. There is a vast classification of these obligations. You can read some of them on the IRS website and ask your lawyer for more details.
Starting a business is quite challenging, isn’t it? The things discussed in this article do not compose all of the basic information you have to understand. There are other crucial matters such as product liability laws and workplace litigations you may need to address. You will need business advisers and lawyers in your organization. They are the persons who will protect your company’s best interests against anomalies and other unwanted circumstances.