The Legal To-Do List Every Business Owner Needs to Memorize
You’re working around the clock to bring your new venture to life, when something dawns on you: this stuff is confusing. Especially all the finicky legal details—with so many things to do as a new business owner, how can you keep track of it all? In this post, you’ll learn how to get a handle on the most important legal tasks, so you and your business can keep taking the world by storm.
1. Pick a name you love
What’s in a name, you (and Shakespeare) might ask? Well, since your name is the first thing customers will see, quite a lot—so take the time to make it memorable.
Once you’ve narrowed down your list of contenders, try to see if anyone else has staked their claim. Begin your search by combing through the U.S. Patent & Trademark Office’s trademark database, checking to see if there are variations along the way. If your name isn’t registered there, go ahead and apply for a trademark.
Trademark secured? Now, grab your domain name. Run a quick Google search to make sure no one else has the one you want, and then register it through a domain service. If you’re planning on incorporating your business, don’t forget to contact your state filing office to see if there are any other companies conducting business under the name you want.
2. Choose your business entity
Picking the right entity type is an important step to starting your business, because it affects how you’re taxed and what you’re personally responsible for.
There are lot of variables to think about here. For example, if you’re the only person in your company and don’t plan on expanding, it might make sense to just remain a sole proprietorship. But if you have a team, more than one owner, or want the ability to sell stock, you’ll have to choose a different structure. Do some research upfront, and then talk to a licensed legal professional to help you make the final call.
3. Get your license (to be awesome)
After your Sweet 16, your business licenses are the most important licenses you’ll ever receive.
To start, find your state on the U.S. Small Business Association website to see what types of permits and licenses are needed to legally operate in your city, county, and state. Some areas require you to have a license as soon as you open up shop, so make sure you know the exact timeframe you have. Then, once you’ve received the appropriate documents, be sure to properly display them in your business.
4. Set up a business bank account
As you chip away at building your company, do whatever you can to avert financial headaches down the road. Opening up a specific business bank account will prevent your personal funds from getting mixed in with your company expenses.
Generally, local banks and credit unions are perfect fits for small businesses. The documents you’ll need to bring to the bank depend on the type of entity you are, but most likely, you’ll need your tax ID number and any documentation that has your official business name printed on it. Unless your business is involved in gambling, government, precious metals, or telemarketing, you can set up an account directly online.
5. Put together a founders’ agreement
Can’t find a founders’ agreement? Then it may be time to write one.
When starting a business with others, it’s super important that everyone is on the same page right from the start. A founders’ agreement will protect all parties involved by spelling out all the complex parts before any issues arise. Your agreement should have a clear explanation of all responsibilities, compensation, equity ownership, intellectual property, and vesting terms.
An agreement won’t foreshadow impending doom—it’s just there to protect you and your business if everything doesn’t go according to plan. And in the business world, that’s usually how things go. To get started, use this Docracy template, and then be sure to consult with a legal professional.
6. Get your contracts in place
Before entering into any business relationship, make sure you dot your i’s, cross your t’s, and get your written agreements in order.
This could be in the form of a non-disclosure agreement for a vendor, or a client contract that explains the service you’ll be providing. While working with contractors, it’s particularly important to draw up a legal contract that details the specific terms of your working relationship. Contracts will keep everyone accountable and prevent messy legal entanglements down the line.
7. Stick a privacy policy on your website
When you launch your website, you need to make sure you have a privacy policy that describes the exact data you’re collecting from visitors. The data you’re collecting may be in the form of email addresses, names, credit card information, and other personal details you’re using to conduct business. Get started with this RocketLawyer template, fill in the gaps, and then run it by a licensed attorney.
While doing so, make sure you also go through this checklist to comply with the California Online Privacy Protection Act (CalOPPA), one of the most stringent online privacy laws out there. Even if your business isn’t in the Golden State, you’ll definitely end up with Californians visiting your website, so make your policy airtight.
Some of the tasks above might look daunting, but once you dive in, you’ll start to see just how manageable they really are. And each time you knock an item off your list, you’ll bring yourself one step closer to becoming completely unstoppable.
Tomer London
Tomer is responsible for the development and execution of the product vision at Gusto, re-imagining how modern payroll, benefits and compliance should operate. He was selected to the 2013 Inc. 30 Under 30 list. Before co-founding Gusto, Tomer was the CEO and co-founder of Vizmo, a provider of self-service customer support technology for enterprise call centers. His prior experiences include serving as a Computer Architecture researcher at Intel Research in Israel, as well as leading product development of the Bump Cube Recommendation application at Bump Technologies. Tomer holds a BS in Computer Engineering from the Technion – Israel Institute of Technology, as well as an MS in Electrical Engineering from Stanford University.