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Have You Chosen the Right Business Entity?
First among your legal considerations when starting a new business should be choosing the correct business entity to match your goals. As a business startup, you have many options, including selecting entities like corporations or forming a limited liability company (LLC). Every business entity structure has its own legal implications, limitations, and aspirations. Some business entities provide more personal liability protection, others have more tax considerations, and others provide more flexibility to the business owner. Entrepreneurs interested in a startup must carefully assess their unique needs and consult with legal professionals experienced in business law to make the correct decisions when selecting the right sort of business entity for them.
The majority of small businesses begin as sole proprietorships because that is the default business structure, and it offers a certain level of simplicity and convenience to business owners. However, being a sole proprietor can put your personal assets at risk, as there is no legal separation between your personally owned assets and your business assets. If this causes you concern, consider forming an LLC. LLCs are permitted in the state of New York, and they protect your personal assets because, in legal terms, you will be considered a separate entity from your business.
To learn more about the many different types of business entity formations available to new business startups, please contact our law firm to speak with our business attorneys today.
Is Business Ownership Clearly Defined and Understood?
Startups can choose a variety of different legal forms for their business entity, though there may be certain requirements that limit some of their choices. For example, sole proprietorships are only permissible for businesses with a single owner. In addition, there may be restrictions on the number of shareholders allowed for S corporations.
For business startups planning to one day go public, it may be necessary to structure the business entity as a corporation, as this is a desirable form of business for building equity and attracting prospective investors. However, in some cases, certain investors may favor business partnerships or LLC structures instead.
Whatever your decision, business ownership must be clearly defined and understood not only amongst your ranks but also by the legal authorities that must approve your business structure.
Do You Have All the Required Permits and Licenses?
You must obtain all the necessary licenses and permits required by New York law before officially opening your business. By acquiring these licenses and permits ahead of time, you can help avoid potential penalties and force shutdowns, as well as help build your credibility and trust within your community among prospective customers and your peers.
For more information on ensuring you have all the required permits and licenses, you are encouraged to contact experienced business law attorneys for legal assistance.
Have You Considered Your Tax Obligations?
Complying with all relevant tax obligations when starting a new business is essential. As a business entrepreneur, you must have a thorough understanding of state and federal tax regulations for your business entity. The many taxes you must consider may include income, sales, industry, and payroll taxes. Maintaining accurate records of all transactions is essential. We recommend that you seek legal advice from tax professionals to ensure accurate tax filings, compliance with tax laws, and accurate tax deductions.
Do You Have Adequate Insurance Coverage?
You must acquire appropriate insurance coverage to safeguard your business against unexpected events and legal liabilities. Depending on the nature of your business, you may require several types of insurance coverage, such as professional liability coverage, personal liability coverage, product liability coverage, and property insurance.
We recommend that you contact our business law lawyers and an experienced insurance broker for guidance on selecting insurance company policies that provide adequate protection for your business and personal assets.
Are You Protecting Your Intellectual Property?
Protecting your intellectual property (IP) assets when starting a new business is vital, especially if you heavily rely on new technology or innovative ideas.
Contact our law firm to discuss various intellectual property protection strategies, including creating trademarks, patents, copyrights, and protecting trade secrets. We can help you spotlight the importance of enforcing your IP rights to safeguard your business’s competitive advantage.
Is Your Business Plan in Compliance with Industry-Specific Regulations?
Different business industries have different unique rules and regulations that startups must be in compliance with. As your legal representation, we can help explain the significance of understanding the various relevant industry regulations, including data privacy laws, consumer protection laws, financial industry guidelines, and health care regulations, to make sure that you are in compliance at all times.
Are You in Compliance with Zoning Laws?
New York zoning laws dictate how businesses and properties can use land in specific areas. You must understand local zoning regulations, as they can have a huge impact on where your business is allowed to be located and how it is allowed to be operated. As your lawyers, we can help ensure that your business start-up aligns with relevant zoning regulations for your chosen location so that you can avoid costly fines or forced relocation.
How Will Your Business Raise Capital?
With the exception of sole proprietorships, most business entity structures raise investment capital without legal or tax restrictions, including using debt, equity, and other derivatives.
We recommend an LLC entity for small businesses raising capital with the help of family, friends, small business investors, and other high-net-worth individuals. LLCs provide investors with the opportunity to make their own terms and conditions that other corporate forms cannot.
Is There Room for Your Business to Grow?
LLCs and sole proprietorships do not allow for the sale of company stocks. With those business structures, you cannot generate funds to grow your business through shareholder investments. However, other business structures, such as S corporations, provide this opportunity. To learn more about S corps, please contact our law firm.
Schedule a Free Consultation with Experienced Business Lawyers in NYC
Our business law legal team can help your start-up get off the ground and comply with all necessary laws and regulations to ensure that, at least legally, it has a clear pathway towards success. Our business lawyers can help you form your corporations or different types of business structures, help draft employment and business contracts, and assist you with legal help throughout the entire process of your business startup.
To learn more about our legal services, please contact our New York law firm to schedule your free initial consultation today. You may reach us at 516-908-9519.
