Starting a new business venture is exciting and challenging. While you may focus on developing your product or service and building your customer base, remember the various legal aspects of launching and operating your startup. Failing to put the right processes and structures in place today can lead to setbacks and headaches down the road. Therefore, we suggest nine tips for entrepreneurs to keep in mind as they embark on a new business journey. Attorney Perry A. Craft is here for you every step of the way.
1. Choose the right business structure
One of the most critical decisions you will make regarding your startup is choosing the right business structure. The structure you pick can have significant implications on taxation, liability, and management. The more common business structures include sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. Each type has its advantages and disadvantages. For example, LLCs provide liability protection for owners and flexibility in management, while corporations may offer access to outside funding through the sale of stocks but come with more extensive regulatory requirements.
2. Protect your intellectual property
If your startup relies on unique inventions, designs, or creative works, you should consider filing for patents, trademarks, or copyrights to protect your intellectual property (IP). You may also consider implementing confidentiality and non-compete agreements with your employees and contractors to further protect your trade secrets.
3. Create contracts and agreements
Contracts are the backbone of any business. Startups must create clear and legally binding agreements for various purposes, including contracts with customers, suppliers, employees, and partners. Well-drafted contracts can help prevent disputes and litigation down the line. It is advisable to consult with an experienced Nashville attorney to ensure that your contracts address relevant legal aspects and protect your interests.
4. Comply with all employment laws
Hiring employees and contractors comes with its own set of responsibilities. It is important you comply with all federal and state employment laws – including wage and hour regulations, anti-discrimination laws, and setting workplace safety standards. Consider developing an employee handbook that outlines your business’s policies and procedures, which can help ensure compliance as well as set expectations for your workers. Your attorney can help ensure your employee handbook is legally sound.
5. Raise capital and funding
Your business may need external funding to grow and succeed. However, there are many legal considerations to keep in mind when seeking investment. Your attorney can help you understand the legal requirements for raising capital – whether you choose venture capital, angel investors, crowdfunding, or other ways. The Securities Act of 1993 and other laws govern fundraising efforts and you must follow these regulations in order to avoid penalties or legal action.
6. Implement taxation and accounting
One of the most important aspects of your startup’s finances is your tax obligations. Remember that different business structures are subject to different tax rules, and it is essential to understand your liability and reporting requirements. A tax professional or business attorney can best help you ensure you are complying with local and federal tax laws.
7. Set up your privacy and data security
As data breaches become increasingly common, startups must prioritize privacy and data security. If your business collects or stores customer or user data, you must comply with data protection laws and implement strong security measures. Ensuring the privacy and security of customer information can help avoid costly legal actions and reputational damage.
8. Consider exit strategies
Even though it might feel premature, all startups should consider their exit strategy from the beginning. Whether you plan to sell the company, go public, or remain privately owned, your business’s legal structure and ownership arrangements should align with these long-term goals. When the time comes to exit or bring new investors on, planning ahead can make this transition smoother.
9. Protect against legal disputes
Despite your best efforts, legal disputes can still arise, either internally or externally. Having strategies in place to resolve conflicts, such as mediation or arbitration clauses in contracts, can help minimize the time and expense associated with litigation. It’s also wise to consult with a Nashville business attorney to develop a risk management plan that identifies potential legal issues and outlines how they might be addressed.
Are you a business owner facing legal challenges or seeking guidance to protect your enterprise? Our experienced business lawyer is here to provide you with expert legal counsel and support. Whether you are navigating contracts, intellectual property, employment issues, or any other legal aspect of running a business, we have the knowledge and expertise to assist you every step of the way. Don’t let legal complexities hold your business back.
Let the Law Office of Perry A. Craft, PLLC be your trusted legal partner. Call our Nashville office or contact us today for a consultation, and we can work together to safeguard your business’s future and ensure its continued success. Your business deserves the best legal protection, and we are here to provide it.
Perry A. Craft has dedicated his life to helping people in need. He has tried, settled, or resolved numerous civil and criminal cases in State and Federal courts, and has represented teachers and administrators before school boards, administrative judges, and the state Board of Education. Learn more about Attorney Craft.