Starting your own business is incredibly exciting, but there are a number of processes you must undergo when starting your own company. It is important to learn about how to deal with the legal issues that come with starting your own business so you can navigate these processes not only correctly, but efficiently, too. Understanding the legal considerations of starting a business will also help you avoid mistakes that are time-consuming and costly. If you are planning on starting your own business, below are seven important legal considerations.

Choosing a Legal Structure

One of the most important decisions you will ever make about your business is how you structure it. The legal structure you choose will impact how you run your business, who is involved in your business, and the legal implications involved. The legal structure for your business will also impact how you keep your accounts and how you pay your taxes. The most common types of legal business structures are as follows:

  • Sole proprietorship

  • Partnerships

  • Limited liability company (LLC)

  • Corporation

  • S-corporation

To determine which legal structure is best for your new company, you must take all liability issues into consideration, and the type of tax structure that would be most beneficial for your business.

Your Trademark

Your trademark is very important. It will form the basis of your branding, and help you set your business apart from the rest. Unfortunately, if you do not choose your trademark wisely, it could lead to problems in the future. If you infringe on another business’ trademark, you could face legal action and if you lose, it will have a very negative impact on your business.

Before choosing a trademark, you must perform meticulous research online. You must determine if there is any other business operating under the same name you have chosen to avoid trademark opposition action. After you have selected your official name, you should then also register it, along with your logo, as your trademark. This will ensure that no one else infringes on your trademark and to protect it in the future.

Required Permits or Licenses

Many businesses need a number of different permits or licenses in order to operate. For example, restaurants that want to serve alcohol are required to first obtain a liquor license. That is just one type of license and permit a business may need. At the bare minimum, you will also need a business license, a trading license, and a sales tax permit. Before opening your business, you should contact local government agencies and perform additional research to ensure you have everything you need to open your business legally.

Know the Zoning Laws

If you have not yet chosen a physical location for your business, you have to keep zoning laws in mind when you do. It is a common mistake for new business owners to assume that because a certain area has businesses similar to theirs, they already have the appropriate zoning. This is not always the case. 

Sometimes, zoning laws change while businesses are already present in the area. These businesses are given exceptions that do not apply to new establishments in the area. You should always contact local government bodies and inquire about what the zoning laws are for a certain area, and to make sure you can open your business in your chosen location.

Important Health and Safety Laws

One of the most important things you must consider at all times when running your business is the safety of others. You will have to ensure you comply with safety guidelines for employees and yourself, customers that visit your business, and anyone else that may enter the premises, such as vendors and contractors. You should perform a risk assessment to identify the potential risks and hazards. Then you must take steps to reduce these dangers as much as possible. You may have to make changes to your standard operating procedures, or remove some fixtures, which are just two examples of ways to make your business a safer place.

Insurance Issues

The types of insurance you will need will depend on the type of business you are running. If you have employees, you will have to carry workers’ compensation insurance in the event that one of your workers becomes injured on the job. You should also purchase employer’s liability insurance, in the event that a customer becomes injured if you will see clients in person. If you do not carry these important forms of insurance, you will leave yourself open to liability, and someone may be able to sue you directly. That will not only affect your own personal finances, but will also negatively affect your business.

Contractual Needs

As a business owner, you may want to create a relationship with another person or company that requires a contract. You may also want your employees to sign certain contracts as a condition of employment. 

You should have non-disclosure and confidentiality agreements if you are working with business financing partners. These entities will have access to much of your business information that you want kept confidential, and these agreements will ensure that happens. You should also ensure that any suppliers and other partners you work with sign this type of agreement, as well. 

Certain employment contracts, such as non-compete agreements, are generally considered non-enforceable in California. You should always have a Santa Monica business lawyer review any employment contract or package before you offer it to an employee to ensure your business is protected in the future.

Our Business Lawyer in Santa Monica Can Help You Prepare for Starting Your Own Company

Starting your own company is an exciting venture, but you should always speak to a Santa Monica business lawyer before you open your doors. At Klein Law, our knowledgeable attorney has helped countless business owners start their business smoothly and efficiently, and we can do the same for you. Call us today at (310) 295-2261 to schedule a consultation and to learn more about how we can help.