Starting a Small Business? Remember These 10 Essential Steps

Thinking of starting a business? These updates will help. For your reference, ten essential steps in planning, structuring and managing your new company, from lawyers and law firms on JD Supra:

1.Select a Business Name

“The name selected must not deceive or mislead the public or already be in use or reserved… Several alternative names should be selected because so many businesses have already been formed. Corporate name reservation fees range from approximately $10-50 per state for a reservation period of 30-60 days. Exclusive state rights in a trade name can also be obtained indefinitely through the creation of a name-holding corporation, a corporation for which articles of incorporation are filed but no further organizational steps are taken.” (Guide to Starting a Corporation by Fenwick & West LLP)

2.Select a Business Structure

“What kind of business should you form? An LLC, C-Corp, or S-Corp? Unfortunately, the answer is always the same: It all depends. But the following factors may help clarify the decision for you. Given that an LLC, C-Corp, and SCorp all offer the same level of liability protection, here are five key factors to consider when deciding which business entity to form…” (How Should You Incorporate? 5 Factors to Consider by Ropers, Majeski, Kohn & Bentley)

3.Trademark your Name

“Any person or company launching a new product or service must give some thought to its intellectual property. While the underlying product or service may be protected by patent or copyright, a strong and catchy trademark is an asset that can be extremely valuable to the entire business. Many new business owners, however, do not understand the nuances that go into trademark selection and protection.” (Launching Your Business or Product? Pick a Good Trademark. by Akerman Senterfitt)

4.Register Fictitious Names

“If you own a small business, it’s likely that you are operating your business under a catchy name which describes the type of business you’re in or the type of service you provide, such as ‘Larry’s Low-Cost Landscaping’ or ‘Al’s Affordable Auto Parts.’ Even if you structure your business as a corporation or partnership, chances are good that you still advertise or promote your business under a different name. Any time you operate a business under a name which is different than your individual or company name, you are doing business under a fictitious name.” (Fictitious Name Registration by Gary Kaleita)

5.Purchase Insurance

“Small business owners wear many hats. The duty to purchase insurance for their business is important, as insurance is a risk management tool. By purchasing insurance for your business you ‘sell’ some of the risks, in certain amounts, to an insurance company. Mitigating or eliminating risks for your business is of paramount importance. So, when purchasing insurance you need to weigh the options, the types of coverage available, the carrier, and of course, cost.” (What Insurance Does My Business Really Need? Ten Key Areas to Consider when Purchasing Business Insurance by Jaburg Wilk)

6.Hire New Employees Lawfully

“An employer’s decision to hire or reject an applicant must be based entirely upon lawful criteria. This requirement applies to all aspects of employee selection, including advertising, recruiting, applications, interviews, and hiring. Avoid obtaining information that identifies the protected class of an applicant, such as the applicant’s gender, race, color, national origin, ancestry, citizenship, age, religion, sexual orientation, gender identity, marital status, pregnancy, disability, U.S. military status, political affiliation or genetic characteristics. Also do not inquire about arrest records or workers’ compensation claims.” (How To Hire/Fire Without Fear! by Sheppard Mullin Richter & Hampton LLP)

7.Use the Proper Classification for Your Workers

“Citing a desire to minimize losses in contributions to unemployment insurance funds, protect workers’ rights, and ‘level the playing field’ for employers that abide by the law, the United States Department of Labor’s 2012 proposed budget reflects aggressive plans to target the misclassification of employees as independent contractors.” (Feds Target Independent Contractor Misclassification by Wilson Sonsini Goodrich & Rosati)

8.Rent Business Space Carefully

“You want to pay careful attention to the definition of the leased space. Many leases are stated in terms of square footage of leased space and you want to be sure that the highest proportion of the space that you are leasing is actually usable space. If the rented space includes hallways, restrooms, elevators, or maintenance areas, you are paying for a lot of space that is not really usable for your business.” (What Should I Look For In My Commercial Lease? by Gronsky Law Office)

9.File (and Pay) Your Taxes

“If you are running your own small business, you should be well versed with some tax benefits for which you may be eligible. The IRS encourages you to claim for these benefits and use the tools and resources the agency has made available for you.” (Tax Tips for Small Business Owners by Darrin Mish, Tampa Tax Attorney)

10.Plan Your Company’s Future

“A business succession plan should address two fundamental events – an unexpected death or disability of the business owner and a planned succession of the business. Planning for an unexpected death or disability generally takes the form of a ‘Buy-Sell’ Agreement whereby another party, such as the business itself, another owner of the business, or a key employee, is obligated to purchase the ownership interest of the deceased or disabled owner.” (Business Succession Planning by McNees Wallace & Nurick LLC)

—-

Further Reading

Agreements All Business Owners Should Have In Black And White (Seth Hinkley)

The Business Owner’s Pocket Guide (Eliot Wagonheim)

Doing Business in the United States: A Guide to U.S. Law for Non-U.S. Businesses (Foley Hoag LLP)

—-

Follow Business Law updates on: LinkedIn | Twitter | Facebook | JD Supra