Everyone who is about to start a new company is aware of the core business skills that are mandatory for launching your organization and surviving over the long term. Considering you already have strong leadership skills and the knowledge how to motivate your employees, you are aware of the importance of a good business planning and strategy. You’ve done your finance homework and developed a good marketing strategy. This should provide you with a clear strategic vision and prepare you to make the right management decisions based on the analysis of the market and the competition.
But what most of the first-time business owners forget to acquire is the roadmap for the legal aspects that are involved in every business startup. These highly administrative aspects of running a company are far less glamorous than the creation of the first prototype or polishing up your website for the launch, so they can easily get overlooked. We are aware that company regulations and fillings are not the most exciting part of your new startup, but they are critical for your personal finances and the overall health of your business. There’s no point in drumming up your new customer base if they’ll only witness your company being dragged into a bureaucratic hell. So let’s take a look at the legal administrative aspects you’re gonna have to deal with in order to steer clear of trouble.
The Bureaucratic Maze
There is a good reason why most entrepreneurs spend countless hours speaking to other entrepreneurs, accountants, and lawyers before they open their business. Dealing with the legal administration is like walking through a maze and it can be pretty difficult to figure out the next steps. Here are the things waiting for you inside:
Will the real name owner please stand up?
Everybody knows that coming up with a catchy name is a big part of success. You’ve come up with a brilliant one and you can’t wait to start printing out business cards. But the thing is that you may not be the only one. You need to make sure that the name you’ve chosen has an available Internet domain name and trademark. You can perform a simple online search on the United States Patent and Trademark Office’s website to check if the trademark is available, but the truth is that many of us don’t think about it at all. If you fail to properly obtain a trademark you’ll put your fledgling business at risk even before it’s spread its wings. And if somebody else already owns it all the time and money you’ve invested in establishing your business name will go to waste. Don’t rely on a simple internet search – the name could’ve been used for a business that has closed down and there are also filed trademarks that were never used. Tricky, right? Well, it gets even more. If you’ve got a general partnership or a sole proprietorship your company name is probably different from your own name, which means that you’ll probably also need a DBA (Doing Business As). And this takes us to the next corridor of our maze.
Searching for the right structure
You’ll want to protect your personal assets from any liabilities of the company – if you’ve already decided to gamble with your personal property just think of your child’s college fund. Of course, there is no such thing as complete security inside a business world, but a minimal risk can be achieved. That’s why it’s mandatory to choose a proper legal business structure based on your specific circumstances. Of course, every structure has its advantages and disadvantages, so it’s not gonna be an easy pick. The most popular options are the S Corporation ( it’s great if you own a small business that qualifies), the LLC ( it’s great if you own a small business and you’re looking for legal protection with minimal formality) and the C Corporation ( If you’re planning to seek funding for your company through venture capital or by going public). Think about it before we proceed because the paths of the maze have just started to branch out.
Paperwork, home affairs, and responsibility
We’re not gonna talk about the papers you need to keep, but about the ones you need to obtain – permits and licenses. Depending on your physical location and the type of your business, you’ll probably need more than one of these ‛pacts with the devil’ on the local, state, and even federal level. The list can be rather long – professional or occupational licenses, general business operation license, sales tax license, land use permits, health department permits… it’s enough to make you forget about the most important factor – yourself. Your home affairs also cost – health insurance, rent, mortgages – and you’ll probably need to cut out the extras you can live without. In order to make sure your family won’t be hit by some unexpected expenses, you’ll need to factor some flexibility into your budget and maybe even consider taking a part-time job until things pick up. And if you think the responsibility for your family is the only one you need to handle you should know that your legal obligations as an employer will start as soon as the first employee is hired. Employment law is quite complicated and it will take time to understand these obligations regarding OSHA regulations, federal and state payroll and withholding taxes, wage and hour requirements, self-employment taxes, unemployment insurance, anti-discrimination laws, workers’ compensation rules… as you can see, every list tends to be quite long.
Your Own Ariadne’s Thread
All the things mentioned above are probably enough to make your head spin, but retaining a good legal standing for your company is becoming increasingly difficult because the governments are imposing more regulations every day and they often differ from country to country, sometimes even an area. It seems that the only way to get your business through this bureaucratic maze is to hold Ariadne’s thread in your hands. Luckily, you can obtain your own by hiring the right legal counsel. It is clear that corporate housekeeping requires certifying and executing various agreements and documents, keeping registers and records, and corresponding with local authorities. It is also clear that you can’t do it by yourself, but that doesn’t mean you don’t need to be familiar with the aspects of legal administration concerning your company. People think that lawyers bring only their legal expertise on the table, but good ones also need to have a broader business knowledge and a wider skill set. You need to be able to explain your position and find the legal counselors that will be able to hear you. There are a lot of startups failing every day because unexperienced lawyers provide them with the same ‛draft solutions’ not paying attention to their specific circumstances. This is why reputable Sydney lawyers point out that you need to listen clearly in order to identify issues. Only that way your legal advisors can actually understand your situation and provide you with an expert advice with the utmost detail, making sure you also understand the advice completely. When the legal issue is clearly identified than it all comes down to ambition, dedication, and patience. In other words, your Ariadne’s thread needs to unroll slowly as you walk, not to pull you blindly through the corridors.
The legal administration is a very complicated maze for the first-time business owners and that’s a fact. But if you are aware of the requirements and know how to communicate them to a trusted legal counsel you can become a perfectly able maze runner in no time.