Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Six Legal Items Entrepreneurs Should Be Aware of When Starting a Business

Author: Scarinci Hollenbeck, LLC

Date: April 13, 2017

Key Contacts

Back

The prospect of starting a business is an exciting one, but it also comes with an inherent amount of risk.

Identifying these risks and working specifically with an attorney from the moment you establish your company can make it easier to address problems as they arise. What follows are several of the most important things you need to keep in mind about entrepreneurship and its intersection with the law when starting a business.

Six Legal Items Entrepreneurs Should Be Aware of When Starting a Business

Be Aware of HR Concerns

There are complex legal situations that entrepreneurs can find themselves in regarding human resources, such as misclassifying an independent contractor when they should have been termed an employee which could lead to big fines. Also, not having appropriate employment agreements in place could leave you potentially exposed to various employee disputes.

The Right Type of Formation Has a Significant Impact On Your Business

Starting a business means that you must decide on the type of legal formation necessary. This is a critical decision that will influence not just your future structure, but also how the company is managed and taxed. There are several different types of formations that are quite common, including sole proprietorship, non-profit partnership, corporation to limited liability company. If you have not yet legally formed the business, you will want to consider issues such as:

  • The types of legal formations available within your state
  • Each individual’s personal investment situation
  • The risk level of the business
  • Your personal liability for legal actions and debts
  • Determining the costs linked to each type of formation
  • Planning for business and personal income tax issues

Your Exit Plan

It might seem too early at the outset of your business venture to think about leaving the company in the future. However, this is something that you cannot afford to neglect. Important documents may need to be drafted during the formation stage of the business, such as a buy/sell agreement, which will articulate what other individuals are able to do in the event that you become incapacitated or pass away. This enables others to step into management or ownership role of the company if you are no longer able to do it. Failing to have a business succession plan in place could prove catastrophic for your company and this why it is strongly recommended that you have a plan prepared.

You Need the Right Types and Amount of Insurance

As is mentioned above, running a business is all about managing risk. You need to be aware of all the potential risks that your company might face and the appropriate ways to minimize these. One of the most important ways to do this is with insurance. There are many different types of insurance policies including umbrella policies that have numerous different types of claims that may fall under them. Common types of insurance for businesses include errors and omissions insurance, general liability insurance and others. Having this in place can make things much easier in the event that a claim arises. Sudden changes in the business that were unexpected could lead to financial costs and aggravation for the owners.

Understanding Your Intellectual Property Rights

Every business has intellectual property that has the potential to become very valuable. Some of the issues may include how patents can drive revenue from your inventions, how copywriters can ensure that only you profit from the original work and how trademarks can increase your business’ profits as well as your brand value. It is essential to protect the inherent value in your intellectual property as soon as possible. As you evolve and have new business relationships this is vital as well.

Contracts Are Key

The standard form of agreement across the business world is contracts. It matters not just that you have a document in place, but that you have a document that works specifically for you. Your contract needs to consider all potential risks and protect you as much as possible.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Corporate Consolidation and Antitrust Issues in Mergers post image

Corporate Consolidation and Antitrust Issues in Mergers

Corporate consolidation involves two or more businesses merging to become a single larger entity. The result is often a stronger and more competitive company that can better navigate today’s competitive marketplace. What Is Corporate Consolidation? Corporate consolidation closely resembles a basic merger transaction. The primary difference is that a consolidation creates an entirely new business […]

Author: Dan Brecher

Link to post with title - "Corporate Consolidation and Antitrust Issues in Mergers"
What is Business Law and Why Is it Important? post image

What is Business Law and Why Is it Important?

Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]

Author: Dan Brecher

Link to post with title - "What is Business Law and Why Is it Important?"
Corporate Transactions: Best Practices for Successful Deals post image

Corporate Transactions: Best Practices for Successful Deals

Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]

Author: Dan Brecher

Link to post with title - "Corporate Transactions: Best Practices for Successful Deals"
How to Conduct a Fair and Legal Employee Termination in 2025 post image

How to Conduct a Fair and Legal Employee Termination in 2025

Ongoing economic uncertainty is forcing many companies to make tough decisions, which includes lowering staff levels. The legal landscape on both the state and federal level also continues to evolve, especially with significant changes to the priorities of the Equal Employment Opportunity Commission (“EEOC”) under the Trump Administration. Terminating an employee is one of the […]

Author: Angela A. Turiano

Link to post with title - "How to Conduct a Fair and Legal Employee Termination in 2025"
Admin Dissolution for Annual Report: What You Need to Know post image

Admin Dissolution for Annual Report: What You Need to Know

While filing annual reports may seem like a nuisance, failing to do so can have significant ramifications. These include fines, reputational harm, and interruption of your business operations. In basic terms, “admin dissolution for annual report” means that a company is dissolved by the government. This happens because it failed to submit its annual report […]

Author: Dan Brecher

Link to post with title - "Admin Dissolution for Annual Report: What You Need to Know"
What Is Antitrust Litigation Law? post image

What Is Antitrust Litigation Law?

Antitrust laws are designed to ensure that businesses compete fairly. There are three federal antitrust laws that businesses must navigate. These include the Sherman Act, the Federal Trade Commission Act, and the Clayton Act. States also have their own antitrust regimes. These may vary from federal regulations. Understanding antitrust litigation helps businesses navigate these complex […]

Author: Robert E. Levy

Link to post with title - "What Is Antitrust Litigation Law?"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. By providing a telephone number and submitting this form you are consenting to be contacted by SMS text message. Message & data rates may apply. Message frequency may vary. You can reply STOP to opt-out of further messaging.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!