Three Business Laws Overlooked by New Entrepreneurs
Starting a new business is an exciting time and most people embarking on this journey are ready to make money right away. That eagerness is fuel for growth, but if left unchecked, it can lead to you skipping multiple business laws that are necessary to follow in growing your business the right way. Make sure you’re protecting yourself and your assets by doing these 3 things.
Establish an Entity
It’s important to separate your business from your personal life by establishing a Limited Liability Corporation (LLC). We’ve outlined this as the first step because, depending on your type of business, you could be in danger of potential lawsuits. As the name suggests, an LLC limits your liability in the case that something goes wrong with your product or service. By setting this up, you protect your personal assets, like your home and car, while having a clear delineation between you as an individual and you as an entrepreneur.
Separate Bank Accounts
Commingling funds is another overlooked factor of new business owners. Once you establish your LLC, you need to open a separate checking account for the business. The separation of money is important to keep your accounting clean and tax preparation simple. The last thing a new business needs is a showdown with the IRS. After the business checking is in place, do not use it for any personal expenses. There are correct ways to pay yourself, such as salary or draw, that will keep your records clean.
Copyrights, Trademarks, and Patents
These are critical for keeping your properties safe. Without a legal claim in your name or product, another company can copy them. You must know and follow business laws to protect your assets and digital footprint. A company using a creative property of yours that you haven’t legally claimed can trademark it themselves, leaving you back at square one.
We know it’s an exciting moment getting your business started, but it should be built on a solid foundation so that you can focus solely on profits and not stress over legalities. Contact us for help keeping your business clean and profitable.