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What legal steps should I take before starting a business?

Picture of Chris Battis By   ·  1 minute read

As a lawyer, I strongly advise entrepreneurs to take the following legal steps before starting a business:

  1. Choose the Appropriate Legal Structure: The legal structure of a business will affect the way taxes are paid, the level of liability protection, and the management structure. Depending on the business, entrepreneurs may consider structures such as sole proprietorship, partnership, limited liability company (LLC), or corporation. It is important to consult with an attorney to determine the best legal structure for the business.
  2. Register the Business: Entrepreneurs must register their business with federal, state, and local government agencies. The registration process varies depending on the type of business and the jurisdiction. This could entail obtaining an Employer Identification Number (EIN) from the IRS, registering for state and local taxes, permits, and licenses.
  3. Protect Intellectual Property: Entrepreneurs should ensure that their business is not infringing on someone else's intellectual property rights, such as patents, trademarks, and copyrights. It is important to conduct a thorough search and consider registering trademarks with the U.S. Patent and Trademark Office (USPTO) or establishing proprietary rights.
  4. Draft Legal Documents: To protect the business and its owners, entrepreneurs should draft legal documents such as operating agreements, partnership agreements, and shareholder agreements. These documents lay out the terms and conditions of the organization and protect the owners' interests.
  5. Verify Compliance with Regulations: Various licenses, permits, and regulations may apply to a specific industry or jurisdiction. Entrepreneurs must ensure compliance with environmental regulations, labor laws, and health and safety regulations.

In conclusion, there are various legal steps to consider before starting a business. Entrepreneurs must adopt the appropriate legal structure, register their business, protect intellectual property, draft legal documents, and verify compliance with regulations. It is important to consult with an attorney to ensure compliance with the relevant jurisdiction's legal requirements.