Starting your own business is an exciting venture, filled with endless possibilities and opportunities for growth. However, before you dive into the world of entrepreneurship, you need to have a solid understanding of the legal considerations involved in business formation. There are a number of DIY services out there that claim that it’s as simple as paying a fee and starting on your way, but there is so much more to starting a business than just filing paperwork. Although no entrepreneurial journey looks the same, there are some practical steps that should help set the groundwork for a successful enterprise.
Choosing the Right Legal Structure
One of the first and most important decisions you will make when launching your business is choosing the appropriate legal structure. From sole proprietorships and partnerships to limited liability companies (LLCs) and corporations, each legal structure has its own advantages and disadvantages. There are many differences between each structure, especially when it comes to asset and liability protection and tax implications. Finding the right fit for your business depends on your chosen industry, the services you provide, and the state in which you will ultimately register and operate your business.
As an example, consider you’re starting a business with your family. Your attorney can lay out a strategy that not only leads to a profitable business but also protects everyone’s assets. You may have come up with a solid business plan with your potential partners, but an attorney will give you the facts about your circumstances. Leverage their legal experience to build a business foundation that respects your values and provides space for your business to grow.
Drafting Contracts and Agreements
Contracts and agreements play a vital role in any business. Like in every aspect of life, it’s important to have clarity when establishing expectations in order to protect your best interests. When you’re ready to get to work with partners, does everyone understand where their responsibilities lie? Is everyone on the same page about when and how they will be paid? Who is responsible for ensuring ongoing compliance or managing employees? There also needs to be policies in place to resolve potential disputes to avoid impeding daily operations.
Disputes are often inevitable, but it’s important to develop a plan of “attack” in order to protect yourself. You may be able to create a boilerplate contract for services, employment, or vendor agreements, but your business has unique needs, which means your contracts need to be created to reflect your best interests. Your attorney can help you develop contracts and agreements during the initial stages of business formation, as well as during ongoing operations.
Complying with Regulatory Requirements
Running a business involves navigating a complex web of laws and regulations. From industry-specific licenses and permits to compliance with employment laws and tax regulations, no two businesses will have the exact same requirements. Failing to follow through with local and federal laws pertaining to your business can lead to severe penalties and in some cases, jail time. When you’re juggling the daily responsibilities of managing your company, it’s easy to overlook minor compliance issues. Your attorney can go over your rights and responsibilities beforehand to help ensure that all the bases are covered.
Getting Clarity Through Legal Guidance
Even if you’re not new to business formation, having a legal team to guide you through the process is always helpful. Developing a relationship with an attorney you trust early on will give you access to their unique insights personalized for your company. Launching a business is not just about having a great idea; it’s about making sure that your business can weather the storm in an unpredictable market through a solid legal foundation.
Starting a business is an amazing way to gain independence and secure your future, and we’re excited to be part of that. At Albright & Lumpkin, PC, our legal team wants to see you and your business thrive. If you’re ready to build the framework for your entrepreneurial future, call our office at (713) 455-6661 to schedule your initial consultation.
Albright & Lumpkin, PC
Latest posts by Albright & Lumpkin, PC (see all)
- Navigating Power of Attorney Responsibilities - September 15, 2023
