Greetings and Happy November! November is National Entrepreneur Month, first proclaimed by Former President Barack Obama in 2011. We are devoting this month to celebrating remarkable everyday successful entrepreneurs who create jobs, spur growth, and innovation. The United States remains among the world’s strongest markets for entrepreneurship. This is largely due to unparalleled access to research and capital, favorable public policy, and perhaps most importantly, a business culture that encourages both risk and creativity.
There’s nothing more exciting than birthing your own business, it can also be substantially stressful. Many entrepreneurs begin businesses without considering the many important legal considerations involved. Today’s topic covers those considerations and how The Law Offices of Marjory Cajoux assist entrepreneurs with the establishment of their new venture while efficiently guiding them through the processes.
Below are some important legal considerations when deciding to start a business.
- Your Business Structure.
- A business can be structured as a sole-proprietorship, partnership, limited partnership, corporation, S-corporation, or limited liability company. At the inception, the owner must decide which structure best suits his or her business. Once selected the business must be registered with a jurisdiction of your choice. Incorporating a business in the state where the company’s headquarter are physically located is called “home state incorporation.”
- Regardless of the legal structure, you must pay filing fees to the state when the incorporation documents are filed. Further the business will be subject to annual requirements and fees imposed by that state for the duration of its life cycle.
- Your Business Name
- Before choosing the name, you must make sure it is available and not trademarked or used by another business. A quick online name search with the United States Patent & Trademark Office will confirm whether your chosen company name is available.
- There are other important considerations to make as well. If you find out that your perfect name’s web address is already taken, you might have to buy that domain name for a price, if it is on the mark for sale.
- Lastly, you can always choose a web address that relates to the name of your business to avoid buying the domain or changing the name of the business.
- Various Types of Business Agreements
- A business can be founded by an individual or a group of people. The group can be composed of investors, colleagues, friends, or even family. Financial start up contributions or maintenance are strictly at the discretion of the group members or founding leader.
- When a group of people want to come together to start a business it is recommended that they have a written arrangement in place that outlines the role of the founders, executive and all parties of interest within the company and their rights and obligations. The agreement should also include the vision of the company and even compensation.
- It is highly recommended that any business involving more than one person have a written agreement in place to curtail future disagreements or possible litigation.
- The key points in the agreement should be discussed carefully, especially important is the discussion regarding what happens should one of the parties of interest decide to leave the company.
- There are several types of business agreements including Partners’ Agreement, Founders’ Agreement, and Shareholders ‘Agreement to name a few. The Law Offices of Marjory Cajoux can advise you on which agreement would work best for your circumstance.
- Licenses
- Depending on the type of business you are operating, licenses or permits can be a mandatory component to starting a business. In some states it may be illegal to operate certain businesses without a proper business license, trading license, and sales tax permit. The number of licenses your business will require will depend on where you are located and the kind of establishment you want to operate.
- Examples of businesses requiring a license or permit include restaurants or bakeries, child or elder care centers, hair salons, gas stations, and medical providers among others.
- It is best to do some additional research and contact relevant local government agencies to learn more about the specific licenses you will need to legally run your business in that state.
- Insurance
- The State of New York enforces zoning laws relating to land use. Seldom will you see a 70-story high rise next to rows of single-family ranch homes, these are all due to zoning laws that ensure fluidity in neighborhoods based in part on use and urban planning. Hence certain businesses or industries can only operate in certain neighborhoods; examples include warehouses, proximity of a bar to schools or houses of worship, etcetera.
- New York State also requires businesses that employ one or more workers to have employer’s liability insurance whether they are part time, full time, temporary, seasonal, casual/ day laborer, volunteers, or family members. Aside from the legal requirement, having sufficient coverage will help you avoid incurring daily fines that can potentially add up to $100,000.00 and vulnerability to compensation claims from employees and visitors who have been injured or sick while on your premises.
- Investing in public liability or professional indemnity insurance is also recommended for New York business owners. It will help protect your business from compensation claims should something go awry.
While a business can technically be formed without one or more of the aforementioned items, these are just a few of the legal considerations for you to think about as a prospective entrepreneur. We recommend that you seek legal counsel from an experienced corporate attorney. At The Law Offices of Marjory Cajoux our experienced staff professionals will work closely with you to ensure your business is properly registered and if necessary licensed from the beginning. Contact us today.
