There is a multitude of legal issues that must be addressed by a person or group seeking to start a business.
First, you need to ensure that the name you want to use for your business is available. This you can usually do by checking with the Secretary of State’s office in the state where you want to incorporate.
Once you have reserved a name, you have a designated period to submit your articles of incorporation, articles of organization, or a partnership agreement.
You will need to decide which corporate form – sole proprietorship, partnership, corporation, S-corporation or Limited Liability Company - best fits your business. The most important considerations in this choice are liability issues and tax issues.
Many businesses require licenses or permits from the state. You will have to research what licenses may be needed and how to apply for them.
If you are entering into contracts or financing arrangements, you may have to disclose information that is proprietary. To protect yourself from loss of trade secrets and confidential information, you should use confidentiality and non-disclosure agreements.
When searching for an appropriate place to run your business, you will need to understand zoning regulations, which may limit the kind of facility you are building to certain areas of a locality, and which may restrict such elements as signage, emissions, etc. Variances may require considerable time and expense to obtain. Also, you should be aware that zoning regulations can change. Don’t assume that you can locate your factory in a particular area because there is a similar facility across the street.
Most small businesses fail within the first five years, but many of these failures are due to mistakes that are easily avoidable. It is important for a person starting a business to understand the law and take advantage of legal protections. Use contracts. Contracts ensure your supply chain and contracts ensure you get paid on time. Using NDAs protects your intellectual property and trade secrets. Make sure you have a good accounting system and sound legal advice on tax and regulatory issues. The law is constantly changing, and your business needs to keep up with these changes in order to prosper.