Startup Law

There are a number of steps any entrepreneur needs to follow and comply with to legally begin a startup business. Startup lawyers can assist with these steps as well as provide guidance on the appropriate licenses and permits required federally, by state, and by county/city.

1. Identify your business location. Depending on the type of startup you are establishing whether it be online or brick-and-mortar, you’ll need to decide on the location, specifically the state and county/city your business will be located in. The location of the business will determine the taxes paid, licensing and permits, and other specific legal requirements as outlined by the state and county/city of the business location.
2. Register for the business structure. You will need to decide on a business structure of your startup and then registered it. Depending on the structure of business will guide the startup in taxes owed, business operations, personal assets that could be at risk, and legal protections. Examples of business structures are Sole Proprietorship, Partnership (Limited Partnership (LP) and Limited Liability Partnership (LLP), Limited Liability Company (LLC), Corporation (C Corporation, S Corporation, B Corporation, Close Corporation, Nonprofit Corporation), and Cooperative.
3. Register the startup business name. There are a number of different ways a startup can and should register its name including as an entity name that is protected at the state level, trademark the name at the federal level, purchase a domain name for the business website, and a Doing Business As (DBA) is a fictitious, tradename, or assumed name that can be registered with the state, country or city of your business location. A DBA may provide legal protection especially from IP infringement depending on the location of the business.
4. Apply for an EIN. An Employer Identification Number (EIN) is a federal tax identification number required of all businesses to be able to pay federal taxes, apply for business licenses, hire and pay employees, and open business bank accounts. An EIN can be obtained by application through the IRS.
5. Apply for a state tax ID number. Not every U.S. state requires a startup to apply for a state tax ID. State tax IDs are only required if that state the startup is registered in requires business taxes.
6. Apply for business permits and licenses. Depending on the goods or services your startup provides will indicate the type of business permits and licenses necessary to operate federally, by state, and in accordance with the city or county the startup is registered in.
7. Open a business bank account. It’s essential to separate your personal bank account and assets from the startup business bank accounts. Any new business owner will want to create a business bank account to avoid certain types of financial liabilities, avoid risk of legal action that could potentially expose personal financial records, and to keep taxes separate and uncomplicated. To do so, you’ll need to provide an EIN, business formation documents, licenses, and other legal documentation.
8. Protect your Intellectual Property. Intellectual property (IP) is a business’ trade secrets, copyrights, trademarks, and patents that are legally protected from unauthorized use. It can take more than five years to officially register your IP so it is a must to protect it right away. There are a number of legal requirements to register your business’ IP and consulting an experienced IP attorney can guide you through that process.
9. Identify potential liabilities. The type of startup business you own will come with a number of liabilities and risks. Liabilities can come in all forms of things that can go wrong. Businesses will potentially experience disgruntled employees and customers who seek legal action, unintended infringement on intellectual property, potential workplace dangers that can cause physical harm to others, among countless other risks that the business could be liable for. Identifying those liabilities and lining up your legal counsel, appropriate contractual agreements, insurances, and financial instruments, will help protect your new business from potential legal and financial harm.
10. Solidify contracts. Once you’ve registered your startup business; applied for the appropriate tax IDs, permits, and licenses; and are ready to get started, you’ll want to have iron-tight, legal contracts in place for everything from an agreement on services to employment to vendor relationships. Solid contracts will eliminate any miscommunications and will stand up in court should there be a contract breach and legal action taken.

When initiating a startup business, it can be a daunting task as to where to even begin but by taking it step-by-step the business can get running in no time. Legal guidance from a startup lawyer can assist and expedite this process as well as ensure every registration, license, permit, and contract is executed accurately; intellectual property is protected; and taxes and securities are addressed correctly.