Starting a business is both exciting and terrifying. Even without all the legal considerations, you still have to figure out a proper business model, build up your partnerships, find perfect employees, and convince early customers. But that doesn’t mean you shouldn't consider troubles with the court too. Be sure to compare legal services be to make your best choice such as Incfile vs LegalZoom here
Many new aspiring entrepreneurs surprisingly risk it all by ignoring all the legal considerations of business. This is a terrible, terrible move at their part because if you ever end up with a matter in the court, it will not only eat up your time but will also significantly slow down your business. So the ultimate solution to this is to ensure that you consider all important legal considerations when you are starting a business.
Here are the key factors to keep in mind.
Choosing Your Business Structure
The way you structure your business is one of the key decisions of any new businesses out there. This decision will significantly impact on many of the key areas of your business such as your control over legal liabilities, and payment of tax. For this reason, you should always pick a structure for your business after you’ve had a consultation with a talented business lawyer. They will provide you with expert advice keeping in mind all the legal considerations. You’ll ultimately find out the most suitable business structure for your new startup.
In the U.S, the legal structures of the business are as follows.
Partnership
Sole Trader
Company
Co-operative
Trust
Many of the business factors will be influenced by the structure you choose, these include.
Flexibility and future needs of the business
Tax implications
Control of the business
Continuity of existence
Limitation of liability
Ongoing administration
Cost and complexity of formation
Intellectual Property and Other Legal Protections
Many new businesses are started based on a service, product, or unique technology. Therefore, it is very important to consider how your business will legally protect itself and its products. Depending on what kind of service, technology, or product you offer, you may need patents, copyrights, and even trademarks in order to protect your intellectual property. If you fail to take these steps, you will be left vulnerable without any legal standing if your product or idea is stolen by someone else.
Shareholder’s Agreements
If you are founding your company with a bunch of your friends who will act as co-founders of the business, you need to consider a shareholder’s agreement. This agreement usually covers important aspects of the business such as -
How often the shareholders and directors will meet
What decisions shareholders and directors can make in the business
How will the dividends be paid
Sale sharing
Dispute resolution
Selling your business
A deed of accession allowing new shareholders to join the business
The Terms and Conditions of a Business
The Terms and Conditions of a business act as a legal contract between you and the customer. This should be clearly set out and provided to concerned parties. It will also depend on how you will provide or deliver it to your customers who pay for it. The terms and conditions should at least mention returns, repairs, and refunds, especially if a business is selling products.
Employer Responsibilities
At some point in your business, you are going to need to hire employees to help out with the operations and other departments of your business. It is very important to familiarize yourself with the standards that exist at the state and national level to make sure that you don’t become legally and financially liable. These include being aware of annual leaves, sick leaves, and superannuation. Do not commence employment operations without considering these key factors.
Partnership Agreements
If you are starting a business with a bunch of partners or a co-founder, then it is important to discuss and agree on some of the following key factors of the business.
Any conditions of the ownership of the business
Salary entitlements
What %tage of the business is owned by each partner
Rights to buy back any shares of the co-founder/s
Make sure a Partnership agreement clearly outlines the roles of every partner individually. It should also mention who manages the company profits and terms for ending the partnership or shutting down the business.
Making sure that you follow all these legal considerations with a business lawyer will help you make an informed decision when starting a business. It will also legally protect you from any court troubles.
Serial entrepreneur, after doing "time" in corporate America, who has learned about what products and services really work well in business today. You can learn from my experience and my associates as we shop from the internet for tools, supplies and information to build our businesses and improve the lives of our family and ourselves on our site http://best4businesses.com/
My strongest belief is that the safest, most secure and most lucrative job you can have is owning your own business. I learned this valuable lesson the hard way by investing time, energy and emotion into a corporate career only to be fired unceremoniously -when I dared think creatively outside the box. My entrepreneurial journey to starting my own business was first by necessity but then turned into a great blessing of prosperity and freedom. Graduating from the school of business hard knocks and learning how to start, manage, and then sell my business for over $1,000,000. Learned more about real life business this way that I learned in my four years at the NYU School of Business.