Starting up your own business for the first time may be one of the most challenging things an entrepreneur will ever do. Before you start up , don’t forget to cover these three areas to keep your business protected!
Starting up your own business for the first time may be one of the most challenging things an entrepreneur will ever do. On top of the day-to-day duties that come with running a start-up, there are so many additional details to take care of – like hiring employees, finding the right location for a storefront, designing business cards – that it’s easy to let the legal facets of the business slip through the cracks. Or worse, put off working on paperwork which in the long run, may do more harm for your business than good. Before you start up (or right when you are starting up), don’t forget to cover these three areas to keep your business protected!
1) Failing to incorporate.
Not incorporating can get your business in a lot of trouble. You’re missing out on paying less in taxes, gaining a sense of legitimacy and professionalism to appeal to your customers, and most importantly, the personal and professional protection incorporating affords you. When you incorporate, you are legally separating your business from yourself. That means that if, for whatever reason, your business is in serious financial trouble and owes a lot of money, you won’t have to sacrifice your house, car, or other personal assets to pay off the debt. It’s also a bonus that when you incorporate, your business is at less risk of a tax audit- and what business owner doesn’t want that?
2) Forgetting to register a trademark.
Trademarks are a name, phrase, logo, design, or symbol that is used to symbolize a product or service. When you register your trademark, you are gaining the right to legally own the design or phrase you’ve designed specifically for your business. If you’ve gone to the trouble to design something and build a brand for yourself, you don’t want that to be taken from you by another business. Conduct a trademark search before filing for a trademark to make sure that your trademark is available first, and then file a trademark application for your unique mark. For example, if your logo is a very specific looking pink daisy and a new business opens with the same logo, they are not legally able to have that logo, ensuring your brand its individuality.
3) Deciding not to hire an outside registered agent service.
Business owners do have the option to act as their own registered agents, but most entrepreneurs find it easier and more convenient to just hire an outside service. A registered agent receives any legal paperwork on behalf of your company. With an outside service, you also get an added level of privacy. If your business is hit with a lawsuit, you wouldn’t want that paperwork to be delivered to your storefront in front of all your customers and employees. With an outside registered agent service, the paperwork would be delivered to your home or outside office and you would be notified privately. Additionally, RA services get notices from the state to remind them when you have paperwork due to the state to turn in. These services act as great reminders to business owners to make sure they always turn everything in on time and don’t fall too far behind which is vital to a growing new business!