My blog focuses on Financial Literacy/Money and Business/Entrepreneurship. Starting any kind of business can be both exciting and rewarding. There is also the potential for mistakes, and the key is to avoid critical ones. The following contributed post is entitled, 5 Common Legal Mistakes Startups Make (And How to Avoid Them).
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Launching a business can be an exciting and certainly rewarding journey. However, as you lay the foundations of your startup, it is important not to overlook the importance of building a solid legal base. This planning phase can help you secure your business against legal liabilities, ensuring that you can continue trading securely and without disruptions as your startup evolves. Let’s look at some key mistakes to avoid below!
Failing to Comply with Property Laws
Whether you are looking to launch a digital-first business or expand a brick-and-mortar organization into the online space, it is important not to overlook the legal aspects that relate to the physical premises of your business.
If you are unsure how to secure your business’s location–be it an office, studio, or family-owned kitchen–it is important to work with specialists like those at the Taylor Law Group. A team of experts can help you better understand your legal liabilities and protect your business premises efficiently.
Neglecting to Properly Register the Business
One of the first steps to take when launching a startup is to register your business. Registering your business name and model is critical to establish the legal identity of your business. This step isn’t to be overlooked!
Here are a few key aspects to focus on:
● Choose a unique business name that is available and consider trademarking it.
● Determine your business structure such as LLC, corporation, or partnership.
● Register your business by filing necessary documents with state authorities.
● Apply for an Employer Identification Number for tax purposes.
● Register for all applicable state and local taxes like sales and income tax.
● Ensure you have all necessary licenses and permits for your business type.
● Open a business bank account to keep personal and business finances separate.
● Draft organizational documents such as an Operating Agreement.
Ignoring Intellectual Property Protections
Protecting your intellectual property is vital if you are looking to establish a successful business! This can help you safeguard your products, services, and creations from counterfeit and fraud.
However, it is important to keep in mind that intellectual property is an extremely complex area of law. Because of this, the best step to take is to work with a specialized attorney who can help you understand what you need to protect and how.
Overlooking The Importance Contracts and Agreements
Did you know that one of the key legal considerations businesses must make is what and how to contract? This aspect is critical. Contracts are your legal shield, and they play an essential role in helping you carry out your operations uninterrupted and safeguard your profits. At the same time, crafting a contract for each transaction or operation can become cumbersome.
To get started, be sure to partner with a specialist who can advise you on the activities in your business that will benefit the most from a contract. Then, work with a specialist to create contracts that are truly bulletproof!
Not Securing Adequate Funding and Financial Planning
If you are just getting started with a small startup, you may think that you don’t need a business plan. However, this mistake can cost you your business–and your ability to secure the funding needed for growth! A business plan can work as a guide for you as your business expands–and it also plays a major role in making you appear trustworthy in the eyes of lenders and investors!
