A lot of us dream of opening a business for ourselves. Who wouldn’t wish to be their own boss? Unfortunately, there are a lot of things you need to consider before opening one. Along with worrying about a business plan, a place, and the cost of your start-up, you also need to think about certain legal matters as well. Succeeding in a commercial market is not easy. A lot of business owners jump into the marketplace without thoroughly understanding the legalities that they should deal with. It is well-advised to not start a business without covering all your legal bases beforehand. A lot of companies have been crushed under the legal liabilities they had to deal with because they did not cover all aspects. Here are a few things that you should do before you open your business in order to protect it from certain legalities.
Be Sure to Protect Your Personal Assets
It is true that your heart and soul goes into establishing your very own business. You would want to put everything into it and not leave any stone unturned. No one likes to think about the possibility of their business failing. But it is important to consider it so that you have time to protect your personal assets. Many companies struggle to break even and end up collapsing. If not, a lot of them might just find themselves the victim of an unjust lawsuit that would eat up their money and time. It is imperative that you protect your assets by forming an LLC. A limited liability company limits the degree to which the business owner can be held liable for damages. So, if a customer sues your company after they receive a faulty product, your personal accounts and finances will be safe.
Check State Laws Related to Publicizing
Once you have formed an LLC or a similar legal entity, it is important to thoroughly research your state laws regarding publicizing your business. A few states and cities require new companies to publicize the news that they have formed their business. This can be done by posting a statement in one of the local newspapers of your town or city. If you fail to do so, it could result in a huge fine or even a refusal on behalf of the state authorities, failing to recognize your business. States such as Nebraska, New York and Arizona have such rules in place.
Understand the Importance of Ensuring Your Workers
Any wise entrepreneur understands the importance of insuring their workers. Most states require business owners that have more than 5 employees to ensure their workers in a multitude of ways. For instance, most of the country requires a business to offer worker’s compensation insurance to the ones that are injured on the job and cannot afford to pay for themselves. It might sound easy to just mitigate insurance rates, but it can have serious consequences down the road. According to an expert Orange County Business Lawyer, it is important to check out a state-by-state comparison of worker’s compensation requirements yourself so that this aspect is well covered. It can be that some small businesses are exempt, but if you are thinking of expanding, be sure to check.
Get General Liability Insurance
Worker’s compensation claims are not the only thing you need insurance for. General liability insurance is actually one of the most important kinds of insurance any business can have. It helps keep your business safe from generic claims of wrongdoing and ensures a level of protection from lawsuits. If a customer slips into your store and injures their back, this insurance will be the one to protect you if they sue for damages.
Nothing Is More Important Than Federal Taxes
Before you open the doors and start your business, it is important to devise a plan of how you intend to pay your federal taxes. It is imperative that you apply for an Employer Identification Number online via a holding company unless you want the IRS knocking on your door. This will allow the US government to be able to differentiate between other businesses and yours while collecting what they are owed. If you have not taken care of this already, it is best to take out some time to browse through the EIN page on the IRS website.
Opening a business is not everyone’s cup of tea. It is easy to fall into the trap of fulfilling legalities when you do not know what you are supposed to do. Use this list to help you ensure that your business will be safe from all kinds of legal trouble in the future.