Launching a business is an exciting proposition for any entrepreneur. It can also be overwhelming. In addition to the logistical tasks of setting up daily operations, marketing goods and services, and getting deliveries to clients, there are many legal considerations in starting a new business.
These legal considerations have important long-term effects on the financial and legal interests of both a business and its owner. It is therefore important to consult with an attorney throughout the startup process of any type of new business. This investment will prepare the business for successful, profitable operations while protecting the legal and financial interests of all stakeholders.
The Legal Implications of Starting a New Business
Strategic planning for business needs to begin before a business is ever formed. In order to maximize the legal protections and liability limitations available to business owners, it is important to select the right type of legal entity for your particular business. This will depend upon the type of business being conducted, the number of owners, and the interests of any shareholders or stakeholders in the business.
Once the entity type has been selected, it is critical that business owners properly file their formation documents with the Secretary of State. Limited liability businesses that are not effectively formed might not have the protections their owners intended. This can occur, for example, if formation documents are mailed to the Business Services Division of the Secretary of State’s office but become lost in the mail and never arrive to be processed. Such a business has not been legally formed. Its owners may be unable to limit their personal liability for the company’s debts as a result.
The type of legal entity you select for your business can also affect your business tax strategy. In order to reduce state and federal tax liability, it is important to have a comprehensive tax strategy which makes use of all available deductions. A tax strategy may also require classifications of the company’s workers, purchases of specific business assets, or changes to the owner of title or record for corporate assets. All of these strategies must be planned well in advance of state and federal tax deadlines in order to make them available to business owners.
Many business owners find that their most valuable assets are intellectual property. A tech startup’s software code and a chef’s prize-winning recipe are examples of intellectual property assets that can have significant monetary value. In many cases (such as a tech startup), the entire business strategy of the company is based upon ownership of intellectual property. The success of such businesses depends on their owners’ ability to protect such assets. Copyrights, trademarks, and patents are some of the most common legal tools to meet this need. They are not, however, appropriate in every situation. Some businesses need more expansive protections, such as non-disclosure agreements with their employees and contractors.
It is important to find the tools that best serve an individual business owner’s particular legal needs. An Indianapolis business startup attorney can help entrepreneurs execute successful business plans and comprehensive legal strategies to meet all their business needs. This positions a business for success from the start of daily operations.