Entrepreneurs today have it easier than ever to start and maintain a successful online business from the comfort of their own homes.
But with this freedom comes more responsibility. They have to make sure that they are personally and professionally protected from potential legal problems.
Here are a few reasons why new business owners should always consult a trusted business lawyer before moving forward with their business plan.
Determining Your Business Structure
There are many ways you may choose to structure your organization, but the three most common ones are sole proprietorships, limited liability companies (LLCs), and corporations.
- Sole proprietorships are typically run by one person and are the simplest types of organizations that generally require very little in the way of administrative setup. Nonetheless, people who run sole proprietorships should check with a legal professional to be aware of both legal and tax details.
- Limited liability companies (LLCs) require you to register certain documents with the state. An example of a legal issue that could arise if an LLC is sued is that personal assets aren’t necessarily protected to the extent that the owner believes they are.
- Corporations are typically larger companies with investors. This type of business requires a greater level of responsibility. It is the obligation of the owners to attend to detailed financial records and pay taxes on time in order to keep the status of being a corporation.
No matter what type of online business you run, it’s always a safe bet to get legal counsel as you determine which type of business is the best for you. They can help you ensure that you aren’t missing any important details.
Does your small business need a lawyer? Read more on this topic here.
Creating and Understanding Contracts
Contracts are likely going to be essential for you in one way or another. Agreements between one or more parties should be detailed while meeting the legal requirements of state and federal regulations.
Standard operating and work agreements, franchise agreements, independent contractor agreements, NDA agreements, and leases are just a few examples of documents that should be reviewed by a law professional. This should be done before moving forward with your online business.
Though costly and often unnecessary, disputes over contracts are more common than you probably think. Developing them soundly from the start can save you thousands of dollars in potential lawsuits down the line.
All parties will also want to rest assured that they are legally and financially protected should a contract end unexpectedly.
Read more on Contract Tips.
Intellectual property includes things like copyright and trademarks, and can also apply to specific types of products and services. For instance, non-disclosure clauses are common in the tech world.
In the digital landscape, this is tricky territory, especially if you are in a business that requires content or image use. Even simple social media posts can get you into trouble if you’re not careful.
Fines and penalties for intellectual property violations can be hefty, so be sure to check with a lawyer about this as you set up your business.
Read more about social media and compliance here.
Taxes and Financing
Here are some examples of things you may need to do with regard to taxes and financing. This will depend on the structure and nature of your business:
- Obtain a federal tax ID number (EIN)
- Open a business account
- Understand sales taxes
- Get a business license
- Register with the state
- Clarify tax structure
You also want to ensure that you include legal expenses in your initial budget and business plan.
Privacy and Security
As you conduct more business online, privacy and security concerns should be at the forefront for anyone considering starting an online business.
A lawyer will be able to advise you on best practices when it comes to data collection and even simple social media sharing. For instance, if you plan to use influencers on social media you need to be transparent about this.
You may need to review other laws such as the GDPR if you have an international client base.
In addition, you should make sure your website is secure and have a clearly defined security system set up if you are running an e-commerce site.
Consult a Business Lawyer Today
Hiring a lawyer while setting up your business is a good idea for the long-term health and sustainability of any online business.
Starting a business is always stressful. Having a qualified and trusted business lawyer on your side from the getgo can bring you peace of mind.
They can pull all the legal pieces together for you from the outset. This will help you build a business that is fully protected from costly legal problems in the future.
If you have questions about building and optimizing a successful online business, we’re here to help!
Call 303-780-7333 for a free 30-minute consultation, or schedule an appointment.
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