What Do I Need To Know To Start A Business Legally?
Hello, everyone. This is Alan Crone, and I’m the CEO of the Crone Law Firm. Welcome to our next legal bulletin, part of our Ask Alan series. And today’s question is, what do I need to know to start a business legally?
Well, the first thing you need to know is about your business. You need to make sure that you’re fully capitalized, that you’ve got a mission, that you understand what business you’re going to be in. Then you need to investigate whether or not there are any local, state or national licensing requirements for your business.
For example, as a lawyer, I have to have a business license, but I also have a law license. There may be if you’re in manufacturing, there may be licenses or permits that you have to obtain from federal or state authorities in order to operate.
So you want to make sure that you understand what those legal requirements are. And then you want to select a form of business formation that is in your best interest from an operational standpoint, from a tax standpoint, and from a governance standpoint.
First, operational is that you want to make sure that it is adequate to help you operate the business, that there are no restrictions on the way that you can be organized.
The second one is from a tax standpoint is: depending upon how many owners of the business you have, depending upon how you’re going to take money out of the business, how you may want to set it up for sale down the road? You want to make sure that you have a good relationship with a tax professional to advise you on the best way to set your business up from a tax standpoint.
And then from a governance standpoint, if it’s just you, then that is easy to govern, because all you have to do is decide what you want to do. Then more than one owner, then the owners need to really have a heart to heart about where the buck stops.
Who’s going to make the decisions? How those decisions are going to be made? What happens if there’s a tie? Is there going to be a kind of decision, maybe borrowing money at a certain level that has to be unanimous? Are there decisions that simply have to be a majority or super majority? Got to think all those things through.
So that’s just the beginning of what you need to know to start a business legally. I hope you’ve enjoyed this. Hope it’s been helpful. If you’ve enjoyed this bulletin, please share it on social media. Please, email it to a friend or colleague. My name is Alan Crone. Thank you. And I’m going to get some Justice.
Legal Video Bulletins: What Do I Need To Know To Start A Business Legally?
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