Perhaps one of the most challenging tasks is starting a new business. Some of what makes the process so complicated are the many different legal issues that are involved with actually starting a business. It’s important to always make sure that everything is covered in terms of legal bases in terms of avoiding lawsuits, fines, and potential jail time.
Here are four of the most important legal requirements for starting a small business.
*First and foremost, perhaps one of the most important legal requirements for starting a small business is to make sure that you’re in total compliance with securities laws. All investors and founders of C-corporations, partnerships, and LLCs are always subject to state and federal securities laws. These are laws that were made in order to require companies to provide accurate and reliable information about their businesses to help enable a fair market. Additionally, they also help to protect from both trading fraud and insider trading. Failing to comply with all of these laws can result in having to repurchase all shares at the issuance price, even if the company has lost all of its money.
*One other important legal requirement for starting a small business is to compose a company handbook. Once all of your legal issues have been completely sorted, it’s important to ensure that everyone in your company is aware of all legal liabilities and understands them as well as you do. This is because, as a business owner, you could end up being liable for anything that your employees do while representing your business. A company handbook is a great way to implement the values and legal boundaries of your company. Furthermore, it can also help to establish the behavior that is and isn’t acceptable both internally and externally.
*Another important legal requirement for starting a small business is to hire an experienced attorney. Many small businesses become so concerned about expenses that they tend to overlook how important sound legal advice is, especially since it could save them upwards of between thousands and millions of dollars as time goes on. The attorney you hire should be experienced in employment law, as well as intellectual property law, contract law, and securities law. While hiring a general counsel is a good step to consider at some point, it’s always common for the work to be spread out between different firms and attorneys. In the long run, the cost will be well worth avoiding all kinds of legal issues.