Nothing can be more exciting than the thought of opening your own business. But you have to go through numerous processes when starting your own company, so much so that your excitement can easily dissipate just thinking about them.
Top lawyers say that learning about and dealing with the legal issues that come with starting your venture first can help you go through these processes correctly and efficiently. You will also reduce the likelihood of making costly and time-consuming mistakes that can delay or negatively affect your plans of opening your business.
When starting your own business, there are a number of legal requirements that you have to satisfy or adhere to. The most important ones are:
One of the many important decisions you have to make when starting a business is to decide on the legal status or structure of your company. Your chosen legal structure will affect how you run your business. It will also have implications on how you pay your taxes and keep your accounts.
The most widely used business legal structures are:
● Limited partnership
● Sole proprietorship
● Limited Liability Company (LLC)
● Corporation
● S-corporation
To decide on which status is best for your new business, consider all liability issues that may be associated with your company. Think about which type of tax structure will be best for your business as well.
Before selecting your business’s official name, perform a meticulous search online first. Find out if there is another business operating under the name you’ve come up with for your new venture. Do this to avoid infringing upon another company’s trademark and getting caught up in a trademark opposition action.
Once you’ve selected your official company name, consider registering your trading name and logo (if you already have one) as a trademark. This will prevent others from registering their company under the same name.
You will need several types of licenses or permits before you open your business. The number of licenses your business will require will depend on the kind of establishment you want it to be. At the very least, you will need a business license, trading license, and sales tax permit.
If you plan to open a restaurant, pub, or catering company, you will have to register with the local governing body for food standards and health and safety oversight. If you plan to provide entertainment in your establishment, you will also need to get the relevant permits for music and entertainment.
It is best to do some additional research and contact relevant local government agencies to learn more about the specific licenses you will need to legally run your business.
If you are still looking for a good location for your shop, establishment or office, you have to make sure that the area you are eyeing is properly zoned for the type of business you plan to operate. Again, do some research or ask local government bodies to be certain that you can open your business in that area.
Do not make the costly mistake of assuming that your zoning is appropriate just because your business is similar to the ones already located there. There will be instances wherein zoning may have changed while the other businesses were already operating, and these companies may have been given exemptions that won't be provided to new establishments such as yours.
As a business owner, you will have to assume several important health and safety responsibilities. These include ensuring that your employees work in a safe, healthy environment.
You also have the duty to look after the well-being of anyone including clients and visitors inside, outside, and near your business premises.
It is highly recommended that you carry out a risk assessment to help identify the risks posed to individuals by your business activities. You then have to mitigate these risks or hazards as much as possible. This may include changing some standard operating procedures and removing some fixtures to ensure that employees and members of the public are safe.
Most business zones require all businesses that employ a number of workers to get employer's liability insurance. But aside from being a legal requirement, when you have sufficient coverage, you will avoid incurring fines every day that you are uninsured. You also avoid leaving yourself vulnerable to compensation claims from employees and visitors who may get injured or sick while they are in your premises.
Aside from an employer’s liability insurance, you may want to consider investing in public liability or professional indemnity as well. These types of coverage will help protect your business from compensation claims if something goes awry.
Lastly, if you will be working with a bank or other partners for business financing or entering into contracts with suppliers, make sure you have the right confidentiality and non-disclosure agreements.
These parties will have access to business information that you may want to keep private and, as such, you should consider preparing these contracts. Make sure your partners and suppliers sign them as well.
Knowing which laws apply to your new business is something that is also important if you want to open a company overseas. If you want to expand globally, make it a priority to consult a trusted corporate law firm to guide you every legal step of the way.
Our guest author Al Tamimi is senior partner at law firm Al Tamimi & Company.