Starting a new business is an exciting and worthy pursuit, but there’s a lot to it. In fact, there are several important legal considerations you should address before you even consider launching your startup. Working with an experienced Fargo business attorney will help ensure that your new business enterprise is ready to hit the ground running and that your best interests are protected throughout the startup process and beyond.
Choosing the appropriate business entity for your business is critical because it affects your personal liability, what you will owe in taxes, and your ability to fundraise (if this is an issue). Your choices include sole proprietorship, a general or limited partnership, a C-corporation, an S-corporation, or a limited liability company (LLC). Many small businesses begin as either sole proprietorships or partnerships because the paperwork and setup time is minimal. These options provide little in the way of liability protections, however and as your business grows, it’s generally a better idea to go with a corporation or LLC. Once you’ve determined the structure that’s best for you and your startup, you’ll need to designate it as such with the Secretary of State.
If your business involves more than one owner, a founder’s agreement delineates each person’s rights and responsibility within the corporation or company. If your business is a corporation, you’ll need bylaws and articles of incorporation, and should also consider a buy-sell agreement If yours is an LLC, you’ll need articles of organization and an operating agreement, and should consider a buy-sell agreement as well. Work with a knowledgeable Fargo business attorney to help ensure that you get this important component right.
Depending upon the type of startup you’re creating, there are likely licenses, permits, and registrations required. These can come in many different forms, including:
This step can be extensive, but working closely with a knowledgeable Fargo business lawyer will help ensure that you cross all your t’s and dot all your i’s.
Every business owner is legally required to pay taxes, and this begins with obtaining your employer identification number (EIN) from the IRS. Depending upon the type of startup you’re involved with, your taxes can include income tax, self-employment tax, sales tax, and payroll tax. You want to get on top of the taxes you are required to pay and to stay on top of them. Generally, business owners are required to pay their taxes quarterly rather than yearly (except for sales tax, which is paid monthly). When it comes to business taxes, remaining timely and compliant is critical.
Keeping careful books is the only way to track your business and to ensure that your taxes accurately reflect that business. Sloppy books not only hinder your ability to maximize your business’s growth but also won’t do you any favors come tax time. If you are ever audited or run into any kind of legal trouble, your immaculate bookkeeping will be to your distinct advantage.
When it comes to creating a startup, consistency is key. Just because you understand the legal ramifications of your new business doesn’t mean that everyone does. A company handbook organizes all the information pertinent to running your business in one handy document that everyone can access. As a business owner, you may be liable for what your employees do, and having a company handbook in place that your employees have all signed off on can help ensure that everyone is on the same page regarding important issues. Additionally, a company handbook can help define your brand and your company culture.
If you’re launching a startup, congratulations! It’s an exciting time, but don’t forget to ensure that you get off to the right start by working closely with a knowledgeable business lawyer. Business attorney Stephen Welle at O’Keeffe O’Brien Lyson Foss in Fargo has the skill, experience, and business acumen to help ensure that your startup is a success. For more information, please email Stephen Welle or give us a call at 701-235-8000 or 877-235-8002 (toll-free) today.