Many entrepreneurs have dreamed of launching their own company for years without even considering the legal aspects that come along with running a business.
So much more goes into operating an enterprise than most people realize. Here are three legal issues that could impact your business before it even gets off the ground.
1. Secure all required permits, licenses and registrations
Each state and municipality has its own rules for securing permits, licenses and registrations. Be sure to check with your state and local government to go through all of the red tape and ensure your entity can legally operate where you plan to conduct business.
2. Create the appropriate business entity
To properly protect yourself and your personal assets, you’ll need to make a wise choice when selecting a business entity. Possible structures for companies include partnerships, corporations, sole proprietorships, and limited liability companies. The level of protection for your personal assets depends upon the type of structure you choose.
3. Ensure you pay the proper taxes
Both as an individual and a business owner you must legally pay taxes. This means you will likely pay self-employment tax, income tax and sales tax. In many cases, the Internal Revenue Service requires companies to pay their taxes quarterly. Failure to do so can result in back taxes and fines.
Though launching a new company is an exciting time, it is also a time to think decisions through soundly and ensure you can operate within the law. The time for considering the legal aspects of running a business is before it officially begins operations.