Entrepreneurs Guide: Small Business Law & Legal Issues

Starting your own business is in equal measure exciting and terrifying. Owning a small business is like walking through a minefield of possible legal issues ready to explode if you are not careful.

legal guide for small business ownersFrom the moment you decide to launch a business, the law should be your constant concern. You can many legal questions of which this guide written by entrepreneurs for entrepreneurs will answer simply and practically

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Business Formation Structures

Once you have decided to launch a new company you need to decide how you want to “structure” or “form” your new firm. This is a legal term which denotes ownership and personal liability for business debts by you the entrepreneur.

Most small businesses use one of these types of legal entities; DBA Doing Business As, Sole Proprietor; LLC Limited Liability Company, INC,  S Corp or C Corp, Incorporation; or Non-Profit.

DBA Sole Proprietorships

The simplest structure is the sole proprietorship. Typically one owner, or a married couple, both own and operate the concern. If you are a solopreneur and work by yourself with no employees this could be a good option.  Taxes on your earned business income are included on your personal tax return.  Also, you must pay self-employment taxes and make estimated tax payments quarterly if you expect to owe more than $1,000 annually.

Simple to form by filing a DBA Doing Business As Certificate.

No protection for personal assets from business liability or lawsuits.

>Advantages of Sole Proprietorship DBA for Business

>How to Pay Yourself as a DBA Sole Proprietor

 

LLC Limited Liability Company

Sometimes called “LACS” is the most popular business structure for entrepreneurs today. An LLC, Limited Liability Company, is a type of hybrid legal entity for businesses. They combine the advantages of multiple owner partnerships and pass through tax savings of corporations. The United States only recognize this type of company it provides some, limited, protection for owners from business debts and court judgments. Additionally LLC is very flexible, allowing for multiple owners and the choice of tax rules either corporate or partnership.

Easy and inexpensive to form LLC, starting at $149 . Read my review of LLC formations and get a Legalzoom promo code to save

> Do You need an LLC to Start a Business Legally?

>LLC vs INC: Which is Better?

>Should Your Photography Business be an LLC?

 

Corporations – C corp and S corp

Incorporations are the most complex type of business structure. They were designed for maximum protection of liability protection for the company owners. Your corporation is a separate legal entity from you the business owner. As such it has specific regulations and tax rules.  Its complexity, greater taxation, and higher formation costs are offset for some entrepreneurs by the greater advantage of the ability to raise business finance money by selling stock shares in their companies. Each state has different corporation rules for formation, taxation, and maintenance. In addition, you will need a Registered Agent to be your point of contact with legal and government agencies.

A disadvantage to many business owners is the possibility of paying double taxes on their earnings. This is alleviated by electing to form an S corp, instead of the standard C corp,  which allows for pass-through taxation. This means that your business earnings are passed along on your personal tax return, with no tax due at the corporate level. Review of C corp incorporation with promo code

>Legalzoom vs Incfile for Incorporations Review 

>How Corporations are Taxed – C corp and S corp

>LLC vs Corporations – Which is best for you?

>Why You Should Not Be Your Registered Agent

Legalzoom S Corp Review  

What type of business formation is right for me – LLC, INC or DBA?

Ownership

Partnerships

 

 

How to Start Your Business Legally

Licenses and regulations, State and Federal. IRS tax registration. Certifications and certifications. Business insurance mandatory and optional.

>Checklist to Start Your Business Legally

>Business Permit Offices List by State

 

Investors – Equity Funding and Non-Disclosures

Intellectual Property

Patents

Trademarks

Copyrights

Finance – Loan Agreements

Personal Guarantees

Collateral Security

Business Name Infringement

Licenses & Regulations (State and Federal)

Certificates and Certifications

Insurance – Mandatory

 

Leases – Office, Warehouse, Retail Store, Restaurant and Factory Spaces

Before you begin looking for space to lease for your business read about the intricacies of commercial leases. They are very different from residential leases, which generally favor the tenant. Office, store and warehouse leases typically favor the building owner.  The average commercial lease is about 30 pages long as compared to two-page residential lease. All that fine print contains clauses that will cost you extra money and could bankrupt your business if you are not careful.

Do not sign any lease for your business without getting a professional attorney to review it and advise you on any issues. I recommend getting the legal professionals at Legalzoom for a legal document review at an affordable price that could save you thousands in the long run.

Office Leases – What you Need to Know

 

Contracts – Suppliers, Vendors

Customer Sales Contracts

Collections – Debts and Unpaid Invoices

Advertising

Product Label Laws

Business Attorney and Lawyers

In-House Counsel

Business Legal Plans

Getting Sued

Breach of Contract

 

 

Employment Law for Small Business

Interview Questions – Legal and Illegal

Fair Hiring Best Practices – Discrimination

Firing Procedures

Background Checks –  What you Can and Cannot Search

Felons and Criminal Records

Credit Scores Hiring Factor

Employment

Sexual Harassment

Fair and Equal

On Job Discrimination

Personal Injury

Workman’s Compensation

Unemployment

Employee Agreements – Confidentiality, Non-Disclosure, and Non-Compete

Employee Discovery – Assign rights to employer Patents

Employee Wrong Doing Your Liability

Cyber Security – Customer Data Protection

Website Privacy and Terms of Use Policies

 

Wills and Estate Planning

Divorce

Name Change

Power of Attorney

 

Sale of Business to New Owners

Assignments of Assets

Trademark and Patents

 

 

 

 

 

 

Finance Your Business

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