Legal Essentials Every Entrepreneur Should Know

Yay! You decided to go for it and start a business! There’s a lot that goes into starting a business, that you, as the business owner, will need to know. 

Business Structure

The first order of business is deciding what business structure will best suit the needs of your business. Each one functions differently and has their own tax implications, liability protections, and regulatory requirements.
Once you have decided whether your business will be a sole proprietorship, partnership, LLC, or corporation, you will need to register your business with the federal government and the state. 

Financial Management

Cash flow is the lifeblood of business. If you don't know where your money is going or coming from, your business won’t be able to thrive. Make sure that you have a bookkeeping system that makes sense to your business. 

This can help you make a more accurate budget to keep you from overspending and to help you plan for future growth. Having those records can also be useful if a dispute on payment arises, you have all the information right there. It can also provide you with a less stressful tax season, since you have all the financial information you need. 

Tax Obligations

As a business owner it is your responsibility to stay informed on the tax obligations for your business. It might be a good idea to consult with a tax planner who can help you strategize on how to make the most of your tax credits and deductions and help you understand your tax obligations better.

Employment Law

Depending on your business, this may or may not be applicable, but if you have employees or you are going to have employees, you will need to understand some basics of employment law, such as making sure you are in compliance with wage laws, anti-discrimination laws, and making sure you are classifying your employees correctly (See Are You Classifying Your Employees Correctly for more information on employee classifications). 

Contracts and Agreements

I could write a book - and I have - about the need to have written contracts and agreements in place. Read my book “Never Shake Hands Again” to learn more about the need to make sure you have a contract in place for whoever you are doing business with. Contracts can help keep you from costly litigations and a lot of headaches. 

Insurance Requirements

Do you know your insurance requirements? Make sure you are keeping your business compliant with any insurance requirements it may have. 

Dispute Resolution

While it’s not anybody’s favorite thing to deal with disputes, when you work with people, it is almost guaranteed that you are going to find yourself in the middle of a dispute. Some disputes might be simple fixes, while others might need to escalate. Having a system of how to escalate those disputes can make it that much easier when those situations arrive. 

It can also be a good idea to build and foster relationships with attorneys so if it comes to litigation, you have someone in your corner already. 

Exit Strategy

Most people don’t go into starting a business thinking about what their exit strategy is going to be when the time comes, and while it may not be the top priority, it is never too early to start thinking about what your exit strategy will be when the time comes. If you have an exit strategy it can make that transition go a whole lot smoother. 

Owning a business can be the hardest, scariest thing you have ever done, but it can also be the most exciting, fun, and rewarding thing you have ever done as well. Having someone on your side can help make things a little less scary. 

Irvine Legal can help you set up you register your business, help with your bookkeeping needs, work with you to tax plan and file your taxes, write and review contracts, resolve disputes, plan your exit strategy and so much more. Schedule a free consultation today at 385-333-7966.