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1. Did You Pick a Name? Make Sure Youre Legally Permitted to Use It
Before you start printing out business cards, make sure the great new name you thought of isnt infringing on the rights of an already existing business. In most cases, you don't need an attorney for this task, as you can perform a free search online that looks at business names registered with the Secretary of State that will tell you if the name is available in your state. Then, take your search to the next level and conduct a no-conflict, free trademark search to see if your name is available for use in all 50 states. And considering you can still infringe on someone elses trademark even if theyve never formally registered it with the U.S. Patent and Trademark Office, you should also do a comprehensive search into all state and local databases (look for an affordable online service to help you with this).
To distinguish your business as a separate legal entity, you'll need to obtain a Federal Tax Identification Number, also referred to as an Employer Identification Number (EIN). Issued by the IRS, the tax ID number is similar to your personal social security number and allows the IRS to track your company's transactions. If youre a sole proprietor, youre not obligated to get a Tax ID number, but its still good practice as you wont have to provide your personal social security number for business matters.
Whether you're a current business owner or are still deciding whether to take the plunge and start a company, it's important to step back and make sure you take all the proper legal steps to ensure your dream is realized with the protection of a legal business entity--such as an LLC or corporation. Stay with us--this isn't as hard as it sounds. Many entrepreneurs dread dealing with the legal aspects of starting and managing a business-mainly because many don't know where to start. But ignoring legal issues can lead to costly consequences down the road. To help mitigate the risk of legal headaches, here are some top tips for getting your business up and running. (Psst: They will also help you manage hurdles along the way). 1. Think through the legal aspects of your business early. While adrenaline and excitement may be pushing you to launch your business as soon as you can, you need to take time to contemplate legal necessities from the get-go. This prevents pitfalls and ensures a timely response should legal problems arise. Common legal issues for entrepreneurs include: choice of entity, business licenses, supply and service contracts, and employee matters. It can be difficult, but try to look six to nine months ahead and identify legal issues you will need to address for your business. 2. Don't wear your heart on your sleeve. Don't take lawsuits and threats against your business personally; make the right decision for the business--not your ego. Sometimes, even if you feel like you are right, fighting and winning a legal battle costs more than avoiding it--not only in money, but also in your time and energy. If you can't separate your emotions, turn to an advisor for objective help to see the right costbenefit analysis. 3. Befriend someone familiar with the law. Establish a relationship early-on with someone you can reach out to when you need help figuring out whether a legal problem is worth the time and money. This doesn't mean paying for an attorney each time you need some friendly advice; however, a good lawyer will want to build and nurture a relationship with new prospects and not charge for every call. Also, you should consider looking into a legal plan that deals with businesses, where you can typically get a lawyer on the phone to triage issues for a flat monthly fee. A good legal plan will provide a year of valuable service for less than some attorneys cost for an hour! 4. Don't use your personal bank account. While there are numerous reasons to keep your personal and business finances separated, many business owners make the mistake of using their personal bank account for their business. Managing two banks accounts might seem overwhelming and inconvenient at times, but using your personal account for business impacts your legal liability. This should not be something you "get around to later"--it should be one of the first steps taken when opening your doors.
5. Get it in writing. It's extremely important to put almost everything in writing. Whether you're negotiating a salary or redesigning your office space. Defining and memorializing important aspects of your business relationship will be the proverbial ounce of prevention worth a pound of cure! Agreements should be well-defined and signed by all parties involved. If you are starting your business with co-founders, get written confirmation between yourself and your partners-everyone should know their role (and ownership) in the company. While it's great to be trusting, clear contracts simplify work relationships. Ambiguous agreements (or no agreements) make for messy business arguments and can lead to future legal disputes. If you follow these tips, you will spend less time on legal problems and more time on what you do best--running your business.
http://www.inc.com/chas-rampenthal/legal-checklist-for-starting-a-business.html
Starting Your Business Checklist: provides the steps recommended for starting a sole proprietorship or partnership. Starting Your Corporation Checklist: provides the steps recommended for starting a corporation.
The first three steps in our checklists include writing a business plan, researching your market, and finding funding to start your business.
1. Sole proprietorship. If you plan to operate the business on your own, either under a business name or your own name 2. Partnership. If you plan to operate the business with one or more partners 3. Corporation. If you plan to operate the business as a separate legal entity, separate from yourself and your personal assets 4. Society. If you plan to operate a not-for-profit organization, in which any funds or profits will be used only for the society's purposes 5. Co-operative. If you plan to operate a business that is owned and democratically controlled by the people who use and benefit from your services
A major difference between a corporation and a sole proprietorship or partnership is that in a corporation, no individual person is responsible or liable for debts (unless specifically outlined in a contract or legal document for your business). Also if any members of your business leave or are replaced, it wont affect the business as a whole and operations can continue, uninterrupted. If you plan to operate a corporation, with the intent to sell shares of your business (for trade of services or investment) it is important to know the BC laws that apply. Read our Seeking Investment? Know the Rules article to find out more. Refer to our Business Structures Information Sheet for an overview of the advantages and disadvantages of the most common business structures. If youre uncertain about which structure is right for your business, a lawyer or an accountant can help you choose. For help finding a professional, refer to our Lawyer & Accountant Referral Services information sheet.
Note: If you operate under your own personal name as a sole proprietor (self-employed person or independent contractor), you do not have to register your business. You can simply go ahead and register for a harmonized sales tax (HST) account, if applicable (refer to our Tax RequirementsStarting section for information on how to do this), and for your municipal business licence. In this case, the legal name of your business is your personal name. 2. Register your business. Once you have been notified that your business name has been approved, you have 56 calendar days to register your business name or complete your incorporation process. If you do choose to register as a sole proprietorship or partnership, there are three options:
1. Online at the OneStop Business Registry 2. In person at Small Business BC 3. By mail to the B.C. Corporate Registry To register as a corporation, there are three options: 1. Self-incorporation online at Corporate Online 2. Assisted self-incorporation using lawyer-prepared material, such as the Incorporation Kit for British Columbia by Simply Legal 3. Incorporation through a lawyer. If you need a lawyer, you may wish to contact the Lawyer Referral Service.
Refer to our Step-By-Step Registration Sheet for more detailed instructions on how to register your business as a sole proprietorship, partnership, or corporation.
To register as a society, there are two options: 1. Refer to the B.C. Corporate Registry website to form a provincial society. 2. Refer to the Corporations Canada website to form a federal society.
If you have any questions about whether or not to incorporate as a society, you should consult a lawyer and/or an accountant. To register as a co-operative, refer to the B.C. Corporate Registry website. Since co-operatives are developed through consensus and members must have a say in major decisions on the democratic principle of "one member, one vote", they can be more complex to set up and to operate than traditional businesses. For more information about co-operatives, refer to the Canadian Co-operative Association (BC Region) website. If you have any questions about whether or not to incorporate as a cooperative, you should consult a lawyer and/or an accountant.
If you register for this initiative, you will be required to pay EI premiums on your selfemployment income, and you will have to wait 12 months before applying for benefits. http://www.smallbusinessbc.ca/starting-a-business
Making your small business legal: 9 steps to legally setting up your new business
Before starting out, make sure your business follows all applicable laws. Taking care of the legal issues associated with starting a new business will keep you on solid ground and allow you to focus on creating
a thriving enterprise.
It's important that your business be on the "up-and-up" right from the start. Taking care of the legal issues associated with starting a new business will keep you out of hot water in the future. Here are the first steps you need to take: 1. Decide on a Form of Business
As a sole proprietor you control the business entirely. You are, in effect, lawfully viewed as one and the same with your business. All assets and profits belong solely to you. You are also personally liable for all debts and legal actions brought against your company.
If you're concerned about potential liability from legal actions against your company, you have the option of forming a corporation or a limited liability company.
Your business name must be registered if it is something other than your full legal name. This is a way of informing the public that you will be doing business as an assumed, or "fictitious" name.
Generally, a search is done to ensure your name is not already in use, and an application is submitted to make it official. You can investigate current use of your chosen business name by looking in your local phone book and browsing online listings.
The details of registering varies from country to country, so check with your country office for specifics. Either give them a call or check for online information using the governmental directory.
It's also a good idea to find out if your chosen name is taken in the form of a state or federal trademark. You can utilize the services of the patent and trademark office. They provide an online trademark search service, and, if desired, allows you to also apply for a trademark or patent online.
For complete assurance that your business name is not already taken, you may want to consider employing a competent lawyer specializing in trademark and patent law.
Licensing of your business depends on the type of business you plan to start. Licensing occurs on your state / county and/or local level. Federal licensing is only necessary for businesses who engage in specific, controlled activities (things such as making firearms, alcohol, tobacco, etc.).
Many countries require a general business license, plus there may be a license required for your particular business type. You should contact some clerk office to find out what licenses you need.
You are responsible for filing and paying income taxes on your business. Assuming your business is a sole proprietorship, you will pay income tax on your net profits.
5. Pay Estimated Taxes 6. Pay Self-Employment Tax 7. Get a Sales Tax Certificate
Contact your state treasury office for information on obtaining a sales tax certificate. A sales tax certificate obligates you to pay applicable sales tax on goods you sell. If your product is to be sold wholesale, or if you are buying materials wholesale, inquire about a resale certificate to avoid paying taxes twice.
Be sure to check with your city and county offices about zoning regulations for your business location. Local governments have laws that enforce the appropriate use of property used to produce income. You don't want to be in the position of having to shut down later because of zoning violations.
Looking for information about small business administration is a good way to learn more about the nuts and bolts of legally operating a small business in your area. By visiting a office you will find many answer, if not all of your questions about doing business locally. Use some online locator to find your regional office. They provide personalized and free counseling to assist you in making the right decisions for your business. http://resources.alibaba.com/topic/178473/Making_your_small_business_legal_9_steps_to_legally_set ting_up_your_new_business.htm