Launching your business is an exhilarating affair that is also often overwhelming. There is so much that every entrepreneur must do before their business starts operating. Among the steps you should take is ensuring you comply with the legal requirements. If you are not at par with what the law requires of every start-up, you risk business closure and legal consequences. Ensure you have taken these four legal steps before starting your business.
Choose a Name that You Are Legally Permitted to Use
Before you start marketing the firm, make sure the name you put out there doesn’t infringe the rights of a business that’s already operating under that name. When you think of a name, search for it online on the secretary of state’s website. Check whether it has been trademarked out of your country or region. If it is not currently in use, make sure you register it before someone else does.
Select a Business Structure
Settling for the type of legal entity that your business will operate determines how successful your venture will become. Current corporate structures include sole proprietorships, limited liability companies, partnerships, and corporations. Every type has its pros and cons. A corporate lawyer will advise you on the structure that suits your company best based on what you do. Most startups choose to go with an S Corporation or an LLC.
Obtain the Relevant Business Licenses and Permits
Depending on the kind of venture you are operating and the location, you might be required to have permits and licenses. They vary from state to another and sometimes at the international level. You may need a sales tax license, an occupational health permit, a business operation license, and a land use permit. The larger the geographical region you wish to cover, the more the permissions you will need.
Get a Business Tax ID Number
It is essential that you establishes your company as a different legal entity from the owner. As such, you should apply for a tax identification number. It is issued by the IRS. If you are a sole proprietor, getting the tax ID is not a must but is recommended.
Every year budding entrepreneurs are looking to turn their idea into successful business enterprises. Besides building your prototype, getting customers, renting an office, or launching your website, ensure you comply with these four legal requirements.