Legal-Ease: Checklist for New Businesses – The Lima News
In times of change like the one we are experiencing now, entrepreneurs have a chance to grow. Many new ventures don’t succeed (if eternity and incredible wealth are the standards of success). Some businesses, by their very nature, won’t last forever, and that doesn’t define the business as unsuccessful. Still, disproportionate rewards may await those companies that “make it”.
Many businesses start out as hobbies or “side hustles”. Sometimes the new “business” remains a gig that the business owner maintains independently of a more permanent, full-time job. In other cases, the new business may grow to a point where the business owner may seek to make the new business the owner’s new permanent full-time job.
Regardless of where a new business is in its early stages, there are several steps every entrepreneur should take as the new business grows.
First, every business owner must have a close relationship with the company’s insurance agent. Any activity we undertake in this world can result in liability and the possibility that someone will sue the company or the business owner. Of course, not all lawsuits will succeed, but the best part about having good insurance is that the insurance company will cover the legal fees of defending the company or business owner.
Second, make sure the business has the necessary government licenses and permits. Businesses may require salespeople, hospitality, advertising, merchants, and various other professional and other licenses required for the business to do what it does. Suffice it to say that if a company is making even decent money, there’s a good chance that the company’s service/product area is being overseen by a government agency that needs a license to at least identify those working in that particular one area are service or production.
Lawyers can help determine what licenses a business needs, but often a proper Google search (based on legitimate government websites) can give business owners initial clues as to the licenses required for a business to do what a business does does or intends to do.
Third, discuss taxation with a tax advisor. Businesses may be subject to certain taxes that are not applicable to individuals. Conversely, companies can sometimes be particularly qualified to take advantage of certain tax benefits. The accountant that the company works with must be more than a tax return preparer. A proper business needs an accounting consultant to carry out tax planning and advice.
Fourth, get organized. Most entrepreneurs cannot afford a professional managing director, so the business owner himself should find a way to manage the various aspects of the business in an organized manner. Almost every business should buy and use accounting software like QuickBooks or NetSuite. Free software that comes with the purchase of a computer or tablet is not enough for most businesses.
Finally, if the business has a potential risk that is impossibly large (possibility of a potentially devastating crisis), the business owner should consider forming an entity such as an LLC.
Lee R. Schroeder is an Ohio attorney with Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agricultural affairs in Northwest Ohio. He can be reached at [email protected] or at 419-659-2058. This article is not intended to constitute legal advice and you should seek advice from a licensed attorney of your choice based on the specific facts and circumstances faced by you.