7 Things You Need to Consider When Starting Your Business
If you are planning to start your own business, congratulations! Being a business owner is hard work, but it is so rewarding to see your business plan come to life. Here are seven things you will want to consider from a legal prospective when starting your own business:
1. Are you going to be starting your business on your own or with others?
When starting your own business you want to decide if you will be owning the business with anyone else, as this decision will be central to how your business is structured from a legal prospective. If you are planning on starting your business with other people you will want to make sure the structure of the relationship is very well documented in your company’s Operating Agreement or Bylaws.
2. What type of legal entity best suits your business?
There are a number of different types of business entities that may suit your business ranging from LLC’s, corporations or professional corporations. There are certain advantages to forming different entity types, like the way you and your business will be taxed or just the turn around time as to how quickly the entity can be formed. It is recommended you discuss with an attorney what entity type best suits your business.
3. In what state should you form your business?
You can choose to form your business in any state. People often have different opinions as to the “best” state to form your business, however, it often makes the most sense to form your business in the state where you will actually be operating out of. Just like with selecting your legal entity, it is recommended you consult with an attorney to discuss what state would be best for your business.
4. What are the licensing requirements for the city where your business will be based?
Most cities and/or counties have different business licensing requirements that you want to make sure you are following from the start of your business.
5. Have you filed the necessary documents with the IRS?
When starting your business will want to file with the IRS for an Employer Identification Number (EIN), which is a nine-digit number assigned by the IRS to businesses operating in the United States. You can do this with the assistance of a tax professional or attorney.
6. How soon are you planning on bringing on employees?
Bringing on employees to your new business is a big step, which comes with a number of additional legal considerations. If you are planning on hiring employees you will want to have a lawyer draft or review your job offers and job descriptions and make sure you have a plan in place to comply with all labor laws, like wage and hour requirements as well as meal and rest breaks. As a best practice, you should have an employee handbook in place that lays out your company’s policies in relation to all of these labor laws and ensure that the policies are followed.
7. Enjoy yourself!
Starting a business is huge task, and the legal items on your new business to-do list can be particularly stressful. Do your best to enjoy the process of being a new business owner and remember to ask for help where you need it!
At Slate Law Group, our firm provides assistance to San Diego business owners. Because California employment law is frequently changing, it is important to form your business with the assistance of a San Diego attorney. By having a San Diego attorney assist you in your business formation, you will have piece of mind knowing your business is in compliance with state and local laws.