Legal issues you must consider when starting a business


Before you start any business, there are legal issues that you need to think about. From your business name, incorporation, to legal implications and structure. These are some of the problems you’d want to consider before beginning your business. Pay attention to the business name you wish to use to ensure no other company is using it. To start with, do a name search with the appropriate state agency. If the name you intend to use is not registered under another business, it would be wise to preserve it.

Find below some of the legal issues you must pay attention to before opening that business.

Your business structure

Decide on a structure that perfectly suits it. Your business can be a sole proprietor, a partnership, a corporation, or a limited company. The liability issues associated with your business will determine the kind of structure that you choose.  You also have to consider one that provides the best tax structure.

Business license

The type of business you choose will determine the license and permits that you pursue. The essential documents you’ll require are a tax registration and business license. A license ensures that you’re accountable for your actions. It protects the public health and safety while keeping track of your business finances for tax.

Without a business license, you’re unprotected illegally, and when penalties come your way, your business may be jeopardized.

Non-disclosure agreements

When entering into business contracts with suppliers, you need to have confidentiality and non-disclosure agreements. The outside firms have access to private business information and can be used against you; you need to have them sign the non-disclosure agreement. For instance, you may be in the business of supplying chairs, and you have an order from a customer of 1000 pieces. You don’t want your supplier to call them once you’ve told them and renegotiate to your disadvantage. There’s a lot of confidential information that goes to other parties, and the best way to ensure protection is to sign non-disclosure agreements.


The business you intend to start will need an appropriate location. You may want to assume that your business is not the only around that area, but the fact is, zoning is critical. It could be that zoning was changed while the other business near you was in operation and thus doesn’t apply to them. That means they have an exemption that you don’t have, and therefore you risk closure.

Get an accountant

Most business owners think that hiring an accountant is a waste of resources. But most of these do not last for more than two years. An accountant will advise you on various businesses’ performance and can easily tell you whether your business plan is valid or just another dream. The professional helps you in managing business finances so that you have a healthy balance sheet. Again, if you’re going to be hit with legal issues, it begins with accounting. That’s why you need to talk to a reputable consultant like Karl Schranz who will guide you on accounting matters.

Some of the legal issues that you ignore as you start your business end up affecting in the long term. Before you fling the doors open for your customers, ensure you have all the necessary documents. With that, you have peace of mind, and you can concentrate on meeting your business goals.

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