Starting Your Business By The Book
I've gotten several questions recently about the legalities of starting a business. So, this week I thought I would address a few of the more common legal issues most new businesses face. But first, let's get the mandatory legal disclaimer out of the way: the advice dispensed by this columnist is probably no better or worse than the advice dispensed by other columnists. Do not take the following advice as gospel or bet the future of your business on any advice given herein by said columnist.
Agreed? Good, let's proceed.
To begin, here's the best legal advice I can give you as a new business person: find yourself a good lawyer and make him or her your very best friend. Granted, your new best friend will charge you an hourly fee for chatting on the phone or talking business over lunch, but you'll find it to be money well spent. A good attorney can save you far more than the cost of his services. I rarely make any decision that has the potential to impact my business without first consulting my attorney.
You can locate an attorney through legal referral services or just by opening the phone book, but the best way to find a really good attorney is to ask other business owners for references.
You want an attorney who specializes in business matters. A few of the things you may need legal help with are: legal business formation, articles of incorporation, trademarks and copyrights, investment documents, employee policies, etc. You may find that a single attorney can't meet all your needs, but if you use a larger firm they will have attorneys on staff that can provide the specialized services you require.
Now, let's take a brief look at a few questions I've received regarding the legalities of starting a new business.
What's a DBA? "DBA" stands for "doing business as." A DBA is another name that you use in the operation of your business other than the legal name. For example, "Jones, Inc." might be the legal corporate name of your business, but you might use "Bob Jones Landscaping" as the everyday business name. In this case, you would see the business described in legal context as "Jones, Inc. Doing Business As Bob Jones Landscaping."
Here's an example of using a DBA to launch a new venture within an existing business. A reader asked: "My wife incorporated a multimedia business three years ago, and I am starting a voice-over business. Is it more beneficial for me to open as a sole proprietorship or to operate within her multimedia business?"
My answer was that he should open his company as a division of his wife's business, operating as a DBA. Even though he is using his own business name (the DBA), technically his wife's corporation is launching the service and therefore will give him some liability protection. Doing so would also help him save on start-up costs (such as having to pay for a separate incorporation). It's relatively simple to keep a separate set of books, and when the new business takes off, he can spin it off into a separate entity.
Will a corporation protect me from liability? It can, if handled correctly. You may have heard about the "corporate veil," which means that you can't be sued personally for anything that happens in the corporation and your personal assets can't be attacked by creditors or a lawsuit on the corporation. But in order to have this protection, you must act like a corporation. This means conducting board meetings, taking notes and publishing minutes in your corporate book.
In addition, be sure to have a separate corporate checking account and, if you need them, corporate credit cards. Don't use corporate money for personal purchases, and vice versa (unless you file an expense report). Many people think they don't need to go to all this trouble if there is just one or two people in the company, but in order to be treated like a corporation, you must act like one. Your attorney can give you more details.
How do I register my company name? To register your company name simply contact the office of the Secretary of State. This is easily done by phone. The registrar will tell you if the name you have in mind is available as a corporate name and will reserve the name for you if it is available. You will be sent a form to complete and submit with a nominal fee. For more information you can also visit the Secretary of State's website.
Do I need a business license? Nearly every business will require a county or city license. Luckily, such licenses are relatively easy to obtain and are not expensive. For local licensing requirements, contact your city or county government offices.
Some businesses might also require a state license. For example, hair stylists, contractors and most businesses serving food fall under the purview of the state licensing board. Each state has an agency that deals with these types of businesses. Contact your local government offices to see if your particular business requires a state license.
Some businesses will even require federal licensing. Examples of such businesses would be those that provide investment advice or that deal with firearms. Federal licensing is typically required for businesses that are highly regulated by the government.
I operate my business out of my home. Do I still need a license? Operating a business out of your home does not get you off the hook when it comes to licensing. You should check local zoning requirements and property covenants. You can find this information at the court house or by calling your local license department. Home businesses are also subject to zoning laws that regulate how property can be used and may restrict various activities.
This is just a sampling of the legal issues that must be addressed by every new business owner. To learn more, take your favorite lawyer to lunch.
Just be prepared to pick up the tab.
Here's to your success.
Tim's latest book is "The 30 Day Blueprint For Success!" We asked 58 Top Internet Money Makers: If you lost is all tomorrow and had to start from scratch, what would you do to be back on top in the 30 days? Their answers just might make you rich!
Can a Microbusiness Help You Enjoy a Better Retirement?
Not having enough money for a comfortable retirement tops thelist of financial concerns among aging Americans, according to a recent Gallup Poll. It even outweighs peoples' worries about having a serious illness or accident.
The Business and Life You Want to Build
In the early days of my first consulting business, I knew I needed some sort of plan to give me the greatest chance at success. I took many a wrong step, yet in the end I managed to put a solid business together.
Evaluating an Opportunity
Business opportunities are often based on broad trends, such as:
Selecting a Venture
The basic rule is simple: "Find a market need and fill it!" The process of finding the need, and the method chosen to fill it are where the difficulties arise.
Solving the Million Dollar Mystery: 4 Steps To Create A Turn-Key Business
You're a smart, hardworking entrepreneur, and you're moving fast. You are highly educated in your field and your business is growing and getting busier each day. But somehow, you find yourself stuck. You're doing more tasks that take you away from your core business, you are working more and earning less. You need help. Wouldn't it be great if there was someone, anyone out there who could help you take away some of the daily tasks so you could focus on the things you really love?
Financing Your Business
Anyone who is serious about making some money is already very well aware of the fact that it takes some type of investment to make this happen. I've read a lot of copy that suggests one can build a business for free, if they are willing to spend an extra amount of time to compensate for their lack of financial backing.
How To Get More Clients and Customers; Dont Sell Be of Service
Whether you are just starting your business or focusing on growing it, I'm sure you are like most small business owners you are looking for ways to get more clients and customers. There is a lot of information out there on selling, persuasion tactics, and gimmicks to get people to buy. I am suggesting a radical shift in perspective when thinking about the question: How do you get more clients and customers?
PTO; Justification of the Means and the Ends
Some would say about certain issues that the means do not justify the ends. Well more often the ends do not justify the means. For instance if you are trying to accomplish something and know that if you do use the most approved PC methods then you cannot get to the desired results, but use those methods anyway as to not appear to offend anyone, then in the end you offend everyone by wasting their time and by failure of the project.
Business Planning for College Students and First-Time Entrepreneurs
More and more students, both in undergraduate and graduate institutions, are deciding to launch their own ventures upon graduation rather than taking the traditional route of working for another firm. Likewise, more and more individuals are leaving their jobs to fulfill their entrepreneurial dreams.
Create Your Entrepreneur Dream Team
I hear it all the time. "What should I do about . . .?" As a business owner you're faced with the daunting task of making all the decisions that affect your business. Should I remain a sole proprietor, become an LLC or is an S Corp better? Should I start using an electronic PDA or stick with my trusty, but out-dated, Day Runner? In what direction should I take my marketing? Is the color right on this logo? PC or Mac? Paper or plastic? Aargh! Big decisions. Little decisions. It can be overwhelming, especially when you consider how each decision has a bearing on the success of your business.
Entrepreneurs: Benefits vs. Features-Know the Difference!
Entrepreneurs know their business. They know their product, their service. Many of them write creative Web sites. But, one thing they are not as adept at is promotional copy.
What Makes An Entrepreneur Tick?
It is only natural that when you start a business, you are doing something different than most people. They not only will look at you because you stick out like a sore thumb _ but human nature will cause people to naturally ridicule what you are doing. They will tell you all types of things like: "You're not business material." "You can't make a living working for yourself." "You'll fail because nobody can ever make any money that way."
Franchise Business and Franchise Businesses
Franchise business is being part of a successfully proven business that has a name or trademark that is well known and profitable. Franchise businesses are strategically tried and marketable with options to expand by offering products and services that appeal to the consumer. Having to make the decision on which franchise business to buy can be challenging. Franchise business consultants can offer assistance to evaluate current franchise opportunities with valued insight. A franchise business consultant may also be able to offer assistance to the business owner who wants to make a current business franchisable.
5 Tips to Step Boldly into the World & Set Yourself Apart from Others
"Real champions believe in themselves even when no one else will!" Author Unknown
How Entrepreneurs Succeed - The 5 Qualities Needed For Business Success
What is it that sets a successful businessperson apart from an average businessperson? Is it down to pure and simple luck, or is it all about having an amazing idea and a successful and strategic business plan in place?
Be An Entrepreneurial Artist: Paint A Picture, then Commit It to Canvas
James had an original concept and he needed an investor. He had a compelling business idea that was a sure winner with the right financial backing. James painted a great picture of the vision he had for his business, but there was just one problem: James wanted to be a businessman, when he needed to be an artist.
The Perfect Little Coffee Shop: Are You Afraid of Failure? Are You Letting that Failure Cripple You
Ah, coffee, the drink of choice when I want to share a special moment with friends, when I want to sit and ponder life or when I want a moment alone. I am an avid coffee drinker. I love coffee and I love the atmosphere of a good coffee house, a café.
Three Cs - What Startups Need to Get a Business Loan, Part 1
You want to get a good, solid overview of what it takes to acquire that business loan you need, especially if you are a startup. The essential element of what the lenders out there require of you can be wrapped up in the acronym, C. C. C. These are...
History of Enterprise Car Rentals
So few really understand the drives and motivations of entrepreneurs. Many write about them, some lecture and teach about what they are, how they operate and what they have achieved; yet so few really understand them. So many fail to realize the dedication and sacrifice it takes to win at that level and the super stars are so rare that one just has to look in awe. One of the greatest stories of Entrepreneurial success is that of Jack Taylor who founded Enterprise Rent-A-Car. I therefore recommend this book about the History of Enterprise Rent-A-Car Book is;
Use Your Youth To Your Advantage
You should wait until you're older and have more business and real-world experience before starting a business. You should just focus on school for now. Nobody will take you seriously at this age.
|© Athifea Distribution LLC - 2013|