Starting your own business can be an exciting, yet hectic, experience. From progressing those lifelong dreams into a tangible business to navigating the ins and outs of becoming a successful entrepreneur, there is no shortage of tasks to check off the list.

When it comes to the legal side of business, there are a myriad of common mistakes that small business owners may run into, which could potentially create costly problems in the future. Most of these problematic mistakes occur at the beginning stages of the business and can easily be avoided—if proactively counseled by an experienced attorney.

Here are four ways to avoid many costly mistakes and initiate your first steps towards a successful startup:

#1. Follow employment best practices

From day one, your business should have employment agreements or independent contractor agreements drafted with clear responsibilities, rights, and obligations. A written agreement is the solid foundation between owners and workers.

These documents may also play a significant role in taxation or termination of a worker and could leave a business vulnerable and liable if not fully detailed in a written agreement. Each state has different expectations and requirements for determining whether your worker is an employee or an independent contractor, so it is important for the business owner to do their research and to work with the appropriate counsel, if necessary.

#2. Choose the right ownership structure

This decision will dictate many of the ways you conduct and grow your business, so it is important to understand this decision from the beginning. To ensure you choose the appropriate structure, ask yourself:

  • What are your potential business risks?
  • What are your potential tax benefits and liabilities?
  • How many and what type of investors would you like to have?
  • What personal liability are you hoping for?

Asking yourself these questions will help you decide if a sole proprietorship, partnership, corporation, or LLC is right for you.

#3. Trademark your brand

Even if you’re a one-person company or a hundred-person business, having the rights to your trade name and logo is important. Failure to protect your intellectual property can leave you vulnerable down the road, making it too easy for somebody to swoop in and steal or mimic your work when growth starts to happen. You should always ensure that your intellectual property and other confidential information is protected.

#4. Seek legal help ahead of time

Be proactive. Get ahead of the legal tie-ups and hefty fees that come from costly mistakes. When juggling the beginnings of a new business, there is a lot to manage–navigating the legalities of the startup process can add a lot to your plate.

Having an experienced lawyer in your corner can help prevent mistakes from escalating into larger lawsuits and penalties.

If you are considering starting a new business, or have already begun the process, Raiff Representation can help guide you in the right direction. Call or email us today to schedule a one-on-one consultation with a skilled family attorney.

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Call or email us today for a free 30-minute consultation so that an experienced business attorney can help with all of your contract-related matters.

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