If you’re a new entrepreneur, an important task is ensuring that your business is compliant with all local, state and federal regulations.
Some legal matters require immediate consideration, and you will want to address those issues as soon as possible. To help, Young Entrepreneur Council members share 10 essential tasks to handle right away when starting a business.
When first starting your business, it’s important to get all the legal matters in order as soon as possible. In your experience, what’s one legal consideration new entrepreneurs should be sure to handle right away and why?
1. Set up a company mailing address
It’s important to set up a company mailing address, especially if you are a remote business and don’t have a physical location. This address will be used in all of your email correspondence, legal documents, and more. You can set this up through a registered agent or through a company that handles mailboxes for businesses. Be aware you can’t use a P.O. Box to receive certain government forms and you may need a physical mailing address. —Nathalie Lussier, AccessAlly
2. Check for preexisting trademarks
One legal matter 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’ll need to go back to the drawing board. The last thing you want to do is infringe on a registered trademark and end up in legal trouble before you get your business off the ground. —John Brackett, Smash Balloon LLC
3. Find a good, experienced lawyer
Get a good lawyer who understands corporate law, finance, and mergers and acquisitions. It’s impossible to know what future legal matters you will face at incorporation, but good lawyers will know what’s ahead, even if you don’t. A good law firm can modify existing documents and help with negotiations. Having a good lawyer who understands how to structure legal matters is important. —Sean Adler, GZI
4. Establish the business as an LLC or corporation
When first starting out, one of the most important legal considerations to handle is establishing the business as a limited liability company (LLC) or corporation. That’s because every other step of the business-opening process will demand the legal name of the business. It’s what makes it possible to get a federal tax ID, which is also required for key financial elements like bank accounts and insurance policies. — Richard Fong, Trustable Tech
5. Put financial agreements in writing
Always put financial agreements in writing. Money can easily break friendships and kinships, and you don’t want any misunderstandings to arise in the future. The agreement should include the nature of the return on investment. This is a serious expression of your commitment to the business and your intent to make money from it. —Bryce Welker, Crush The GRE Test
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6. Publicize your company legally if necessary
One of the first things you should do before starting your business is determine if you need to publicize your company legally. Some cities and states require business owners to publicly announce that they created a company before they’re recognized. Failure to follow this step could result in hefty fines, confusion, and legal issues. —John Turner, SeedProd LLC
7. Understand your estimated tax payments
Talk to a CPA about your estimated tax payments, especially if you offer professional services. It would be unfortunate if you lost your license because of the back taxes you owe. In the first few years of business, you don’t want to underestimate your dues to the IRS or find yourself in a financial bind. Estimated tax payments per quarter are ideal. —Givelle Lamano, Lamano Law Office
8. Ensure you’re following the right payment rules
Make sure that you’re compliant with payment issues. There are many regulations that govern how you can accept payments from your clients. This is especially important if you work with clients who live in other countries, as you’ll need to consider currency exchange rates and taxes. By working with a legal professional, you can ensure that your business is following all the right rules. —Syed Balkhi, WPBeginner
About the Author
Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most successful young entrepreneurs.