Starting a new business can be exciting and lucrative. But it also comes with a great deal of responsibility and potential pitfalls. Here are four things you should consider before beginning a business.
Choose a Legal Structure
Operating a business without forming a legal entity can expose you and your partners to substantial personal liability and negative tax consequences. In contrast, forming a corporation or a limited liability company turns your business into its own separate legal entity. Of course every legal structure has different risks and benefits. As a result, it is best to consult with a corporate attorney to decide what business structure is best for your particular situation.
Use Written Contracts
From taking on partners, hiring key employees or independent contractors, or working with vendors, contracts should be the lifeblood for your business. A business attorney can help you prepare clear and concise contracts that ensure your business is adequately protected. Your attorney also will be able to review contracts that other parties bring to you for signing.
Create a Records System
Keeping adequate records of your income and expenditures is essential to a successful business. Enlist the help of a tax advisor, accountant, and/or bookkeeper to keep you on track. Always calendar tax-related deadlines and timely pay any outstanding amounts.
Protect Your Business and Its Assets
Businesses always should consider insurance to protect against legal claims, theft, and other unexpected events. There is no “one size fits all” solution when it comes to insurance coverage, so it’s imperative to find an agent you can trust to explain all of your options. You may also need to consult with an intellectual property attorney to register your trademark and other intellectual property.
Even if you do everything right, you probably will still have to deal with legal disputes in the course of your business, including (for example) contract disputes, business fraud, employment matters, or intellectual property infringement. Legal disputes can sink a business if they are not handled properly by an experienced attorney. That is why you should always turn to a litigation attorney [add hyperlink] whenever a legal dispute arises.
If you would like to consult with an attorney about your business, contact Law Offices of Robert L. Hill today for a free consultation. 760-448-4425.