Legal Issues to Consider When Starting Your Business

Your Business Name

You will need to make sure that the business name you plan to use is not already being used by another business. You can do this by doing a name search with the appropriate state agency, which is usually the office of the Secretary of State. If your chosen name is not already in use, you can reserve it with the Secretary of State's office for a period of time, about 120 days, while you prepare your articles of incorporation, articles of organization, or a partnership agreement.

Your Business Structure

You will need to decide which business structure best suits your business. Your business could be structured as a sole-proprietorship, partnership, limited partnership, corporation, S-corporation, or limited liability company. To decide what form is best, you will need to consider liability issues associated with your business and which form will provide the best tax structure for your business.

Business Licenses

Depending on what type of business you plan to engage in, you may need a variety of licenses or permits. At a minimum, you will need a business license and tax registration. Read the related article on licensing requirements for more information.

Non-Disclosure Agreements

If you will be setting up financing for your business or entering into contracts with suppliers, you should consider confidentiality and non-disclosure agreements. Since these outside firms will have access to business information that you may want to keep private, you should consider having them sign these agreements. If you are ordering a thousand gizmos for your grand opening, you don't want the supplier to call your competitor to see if they want a thousand gizmos so that they can offer them on the same day. The more confidential information your business plan contains, the more important these agreements are.

Zoning

When you are selecting the location for your business, you will need to make sure it is properly zoned for the type of business you plan to operate. It is not okay to just assume that, if your business is of the same type as the one that is currently there, the zoning is appropriate. Zoning may have changed while the other business was operating, and that business might have been provided an exemption that won't be provided to yours.