Starting a new business can be exciting but frustrating. You'll be swamped with myriad tasks as you begin a life of entrepreneurship. In order to be successful, you should follow some basic steps to help keep you on track and safeguard your business. Neglecting certain requirements can lead to major financial and legal problems.
Checklist For Start-Up Companies
The following is a list of basic steps all start-ups should take:
- Write a business plan. A business plan is an absolute must when you seek financing and when you have your paperwork drawn up. Keep it simple yet thorough, and follow it up with the proper documentation.
- Structure the company. Whether you're opening a beauty salon, consulting service, boutique or lemonade stand, you need to know how to structure your company. Depending on who will own your business, whether there will be voting members, how profits will be distributed and other matters, you may need to set up your business as a corporation, LLC, partnership or sole proprietorship. Consult an experienced corporate and commercial attorney if you're unsure how to structure your business. You could run into tax issues and other problems if it isn't structured properly.
- Register your business name and obtain tax ID numbers. Conduct domain and trademark searches and check with the Secretary of State to make sure the name you want is available. Check with your attorney if you don't know how to apply for state and federal tax ID numbers.
- Comply with local, state and federal government regulations. There are laws that pertain to running a business with which you must comply. These include but are not limited to privacy laws, environmental regulations, safety and labor laws, and practices regarding the collection and remittance of taxes.
- Draft contracts and agreements. The legal documents you need depend on how your business is structured. You may need a Partnership Agreement, Articles of Incorporation, By-Laws, Buyout/Buy-Sell Agreement, Shareholder Agreement, the all-important Operating Agreement and more. Because agreements carry long-term effects and consequences, you should seek assistance from a business lawyer when drafting and filing these documents.
- Obtain permits and licenses. You must have a business license, and if you plan to sell anything you need a seller's permit. If you fail to secure proper local and state permits and licenses, you may be fined or shut down.
Seek legal counsel for assistance with structure- and tax-related decisions and the drafting of documents. Following these steps will set your business up for success.