You just came up with the next great business idea and you can’t wait to get started. Your creative juices are flowing and your entrepreneurial spirit is on fire. As you’ve gone to the drawing board, you’ve realized that you aren’t exactly sure what the legal requirements of running a business are.
Legal Requirements For Starting A Business
Learning and understanding the legal basis for startups can help you ensure that your company won’t be fined, or worse, have a lawsuit brought against it for breaking the law. Following these next steps and having legal aid will help you in your process of getting the basic types of legal documents needed for your business.
1. Determine the entity type:
Defining yourself as a solo proprietorship, limited liability company, corporation, etc will be essential in getting you started with the proper legal documents needed to support your business and protect yourself.
2. Obtain necessary licenses, permits, operating agreements, and other documentation needed:
Depending on your business and what you will be profiting off of, it’s important to have the correct licenses and permits in place. Additionally, there are basic legal documents needed such as an operating agreement to ensure your business is lawful.
3. Set up business payment accounts:
If you accept online electronic payments or have it siphoned through a bank, it’s vital to keep your personal account and your business account separate. This will make sure your books are on track and payments are going through as they should.
4. Implement a founders agreement:
A founders agreement can sound like an intimidating thing, but in all reality it’s necessary to protect you, your business, and potential partners that you’ve started the company with. This will outline important “what if” questions and have an exit strategy in place.
5. Identify the types of employees:
If you plan on hiring employees, knowing the difference between an independent contractor and a W2 employee will keep your business inline with legal regulations. Additionally, internships can also pose a problem if not done correctly and according to your state or country laws.
6. Establish a privacy policy, terms and conditions, and cookie agreement:
It’s bound that your company will have an online presence, and if not, these are documents that are still handy to have. A cookie agreement will be particularly helpful if you are collecting online information from the user to further your marketing efforts, if payments are taken, or any other reasoning behind their online information.
7. Follow email marketing regulations:
Email marketing is used by thousands of companies as it is an effective marketing strategy and can help bring in new leads for a business. Although proven to be a successful technique, make sure that you are following proper regulations surrounding email marketing and how you obtained their information.
8. Seek professional counsel:
It’s important to note that Entrepods is NOT a legal entity and any advice given is our personal opinion on what we think should be considered when starting a business. This being said, it’s imperative that you seek your own legal advice and counsel to fully understand the legal basics of starting a business and ensure you are fully protected.
If you’re looking to learn more about the legalities of starting a business, we recently had a guest, Jeremy Streten, on the show who talks in great detail about the basics of protecting yourself and following basic regulations. Jeremy runs a business called Basic Legal Lifecycle and helps business owners like yourself get started! Visit his website today to learn more.