Every entrepreneur has a dream…
Independence – both financial and personal…
Providing a good life for their family…
Grabbing their little piece of the American Dream…
With the head in the clouds dreaming, it’s easy to forget some simple legal steps you can take to get your business off to a good start and provide a firm foundation for the business as it grows.
When you’re starting your business, keep these five tips in mind:
1. Don’t Mingle Personal and Business Funds
When you start your business, file the appropriate paperwork to cement your corporate structure. Form a limited liability company, a partnership or corporation to avoid personal liability and keep your personal assets from being at risk for corporate actions. Apply for a Federal tax identification number for the business once the corporate paperwork is filed.
At the same time, open a separate bank account for your business. Any payments made to you by the business should be made as a paycheck written on the business account and deposited to your personal account, just as an employer pays you. Never take cash out of the business account for personal expenses.
2. Take the Time to Register Your Company Trademark
Trademarks aren’t just for Apple™ and Cisco™. Your small business needs one, too. One of your biggest intangible assets is your reputation. You work hard to build a solid reputation with your customers by providing quality products and great customer service. If some other company is out there using the same name but giving shoddy service, your reputation can be damaged beyond repair.
Trademark the name of your business to protect your reputation and to make sure that you have legal rights to that name. That way, no other company can come along and sue you claiming they own legal rights to the name.
Talk to an attorney about the requirements and limitations surrounding what you can and cannot trademark.
3. Find and Hire a Really Good Accountant/Legal Advisor
Yes, the section at Barnes and Noble may be full of books on business law and tax accounting, but nothing can take the place of having a good accountant and/or legal advisor in your corner.
Make sure your accountant is familiar with your particular industry and all the ins and outs of taxation that apply to your business. They will know what you can and cannot deduct and keep you from doing things that tempt the Internal Revenue Service to pay you a visit and audit your books.
4. Protect Yourself with Employment Contracts
Every business has some information they would prefer not to share with the competition. It could be pricing, a customer list, sensitive product development information, and a list of other things you want kept quiet. Make sure that you have everyone who works for you under contract and that those employment contracts specifically protect proprietary information.
All employment contracts, regardless of the level of the employee, should include non-disclosure and non-competition clauses to prevent employees from leaving and sharing what they know with your competition.
5. Take Any Lawsuit Seriously
If you’re served with a lawsuit, don’t think it will go away on its own. You may not think the suit has merit but the law may see things differently. Every lawsuit must be answered regardless of your opinion of it. Contact your legal advisor immediately if you receive notice that you’ve been sued. If you don’t take swift action, a relatively small issue can turn into a legal (and expensive) nightmare.
Owning a small business can be one of the most rewarding experiences in a lifetime. By following these simple steps, you can make sure that your business starts and stays on the right track.
Click this link to learn more about Acton, MA Creative Business Lawyer, David Feakes.
The Parents Estate Planning Law Firm, PC
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