To set up a business today, you need to know how to set it up properly. Even though your business may differ from others in the same industry, there are still some commonalities among each. One of the most important is setting up your new business based on all of the laws of that city and state. Many of these laws are not optional for you to follow but they are essential for keeping the business practices legal. For anyone who wants to make sure that they are adhering to the letter of the law, here are some things you need to get ready to take care of before you open your doors.
- Make Sure to Keep Good Records of All Legal Documentation For Support
One of the most important things that you can do in any business is to keep good records of your business activities, legal contracts, and other forms that you may need later. You need these files to support a variety of activities, approvals, permissions and so forth. For example, if you have permission and authorization to sell products from a certain manufacturer at a set price, or Articles of Organization documents, you need this backup available in the event your business practices are questioned in any way. By keeping good records, this documentation will help you to save time and money when you can retrieve it quickly. Your ability to act quickly may also protect you and your company from situations that involve potential lawsuits.
- Choose What type of Business You Will be Running — Tax Law Implications
Starting up a business takes time and effort if you really want to do it right and cross all the T’s and dot all of the I’s. So, it is essential that you make a list of all that is involved in launching your new business. The list that you make must be comprehensive if you are planning on checking off your to-do list as you go. For instance, as you begin to look at your list, you will most likely see an item that says, “select the type of business that you will be running.” This is because you may envision starting a sole proprietorship, a partnership, an LLC (limited liability corporation) or a corporation.
Setting up these types of business should not be taken lightly since each type of business has a large impact on the taxes that you will be required to pay. The type of business that you select can also have a huge bearing on who is at fault if an individual sues the organization. For instance, if you are setting your business as an LLC, you can separate the liabilities of the business from your personal debt. Other business types like partnerships will require you and your business partner to share the debt if the operations fold. If you do not consider the tax implications or who will be liable for debt on the front end, you can hurt your business and its ability to thrive.
- Determine How the Business Will be Funded – Make Sure No Money is Co-Mingled with Personal Financing
Funding your business with the finances that it needs is a big part of making sure the business can run smoothly. Your funding resources may come from a variety of financial resources, including borrowing a loan from the bank, or family members pitching into the startup by investing their own funds. Once you know the state of your finance and how much you will be working with, you can then allocate a budget to pay for the operational expenses. In short, you need to make sure that you have a financial plan in advance that can take your business well beyond a five-year plan.
- Know When You Need Legal Advice From Experts in Your Industry
Before you make decisions that could be damaging to your company, you may need to seek out advice from an expert in a diversity of essential legal matters, particularly in an area that may leave you open to a competitor’s lawsuit. This is especially the case for situations that can compromise your entire business and personal livelihood. Remember, it only takes a small window of time to hurt the business’s reputation and its brand.