If you’re a new entrepreneur, an important task is making sure your business complies with all local, state and federal regulations.
Some legal issues require immediate consideration, and you’ll want to resolve them as quickly as possible.help Young Entrepreneurs Council Members share 10 essential tasks to tackle right away when starting a business.
When starting a business, it’s important to get all legal matters in order as quickly as possible. In your experience, what is one legal consideration that new entrepreneurs should make sure to address right away? Why?
1. Set up a business mailing address
Setting up a business mailing address is important, especially if you’re a remote business and don’t have a physical location. This address will be used for all your email correspondence, legal documents, etc. You can set this up with a registered agent or a company that handles business email. Note that you cannot use a PO Box to receive certain government forms, and you may need a physical mailing address. —Nathalie Lussier, Access Ally
2. Check for earlier trademarks
One legal issue that needs to be addressed when starting a business is trademark issues. When creating your brand or developing a product, always check to see if someone has trademarked the name. If they have, you need to go back to the drawing board. The last thing you want is to infringe a registered trademark and get into legal trouble before your business even gets going. —John Brackett, Smash Balloon LLC
3. Find a good and experienced lawyer
Find a good lawyer who understands corporate law, finance and M&A. It’s impossible to know what future legal issues you’ll face when forming your business, but a good lawyer will know what the future holds, even if you don’t. A good law firm can revise existing documents and help with negotiations. It is very important to have a good lawyer who understands how to arrange legal matters. — Sean Adler, GZI
4. Establishing a business as a limited liability company or corporation
When starting out, one of the most important legal considerations to address is establishing the business as a limited liability company (LLC) or corporation. That’s because every other step in the opening process requires the legal name of the business. This makes it possible to obtain a federal tax ID number, which is also required for key financial elements such as bank accounts and insurance policies. —Richard Fong, Trusted Tech
5. Write down the financial agreement
Always put financial agreements in writing. Money can easily break friendships and family ties, and you don’t want any misunderstandings in the future. The agreement should include the nature of the return on investment. It’s a no-nonsense expression of your commitment to the business and intent to make money from it. —Bryce Welker, crushing the GRE
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6. Legally promote your company when necessary
The first thing you should do before starting your business is to determine if you need to advertise your business legally. Some cities and states require business owners to publicly announce that they created a business before they can be recognized. Failure to follow this step could result in large fines, confusion, and legal issues. —John Turner, SeedProd LLC
7. Know your estimated taxes
Discuss your estimated taxes with a CPA, especially if you provide professional services. It would be unfortunate if you lost your driver’s license due to delinquent taxes. During the first few years of your business, you don’t want to underestimate your IRS taxes or find yourself in financial trouble. Estimated tax payments each quarter are ideal. —Givelle Lamano, Lamano LLP
8. Make sure you follow the correct payment rules
Make sure you comply with payment issues. There are many regulations governing how you accept payments from customers. This is especially important if you work with clients who live in other countries, as you need to account for currency exchange rates and taxes. By working with a legal professional, you can ensure your business follows all the correct rules. —Syed Balkhi, WPBeginner
about the author
Young Entrepreneur Council (YEC) is an invitation-only organization made up of the world’s most successful young entrepreneurs.