Question General Counsel: Legal criteria when starting off a business enterprise | Company

There are numerous legal criteria when setting up a small business.  As attorneys, we are privileged to help business enterprise proprietors start and work organizations.  Sadly, we also see all the errors built by business enterprise owners.  Hopefully, the underneath outline supplies guidance that can immediate and safeguard enterprise house owners. 

Deciding the ideal business enterprise entity – sole proprietor, LLC or company?

Each individual probable organization proprietor need to look at forming a company entity to limit his/her person legal responsibility for the money owed and other obligations of the business enterprise.  Devoid of these types of business entity, you are a sole proprietor or partnership and can be independently liable for business enterprise money owed. 

Nevertheless, obtaining a individual enterprise business, such as a corporation or limited liability business, could enable you to separate your own property from those people of your small business — and thus safeguard your personalized belongings from specified promises versus your business.

Administration and governance of entity

If you are going into organization with one particular or much more other individuals, it is necessary that you establish the management of the entity through created documentation.  An LLC must have an working agreement corporate really should have shareholders arrangement, and many others. 

These documents define the management and governance of the company entity.  They seem forward to anticipating and, hopefully, averting disputes.  If you are in small business with some others, it is vital to have strong governing files.  If you really don’t, you could knowledge disputes that could wipe out the business enterprise.

Identify and trademark legal rights

When you get started a business, the identify of your enterprise can be vital in attracting consumers.  But wondering of a wonderful title is only the first action.  The entity can not have the exact same title as a further enterprise in the state in which it is organized.  If the business enterprise employs a trade name, that also considerably be registered. 

Eventually, registration of the enterprise title or trade name does not deliver federal trademark rights.  So, it is vital to consider registering the identify with the U.S. Patent and Trademark Place of work (  For far more details, read this report, What is in a Small business Identify.

Registering the place enterprise is “doing business”

When you start a enterprise, you must sign-up your organization in just about every condition in which it “does company.”  If your business has workers in a condition other than the point out in which the company entity is arranged — even if it is an employee who usually travels into the state on revenue phone calls — or if your small business does additional than occasional business enterprise in a different condition, then the enterprise entity could want to sign-up as a “foreign entity” in that other point out.  

Deciding on a registered agent

A business enterprise have to appoint an official agent in each individual state in which it is registered and/or carrying out business.  In all states, when a company entity is sued, the lawful papers for the lawsuit may be served on its registered agent.  Though business enterprise owners can serve as their registered agent, as mentioned in this write-up, it is not encouraged.    

Employees, contracts, and other registrations

In addition to appropriately registering your business enterprise, the business enterprise has numerous other hurdles to take into account.  It needs to sign-up with the IRS and point out taxation authorities.  Dependent on the small business, it may perhaps will need to sign-up with condition skilled regulators/licensing authority to carry out business enterprise.  If you system on selecting workers, you need to ascertain whether salaried, hourly and how to effectively fork out.  And, for pretty much any company, you will need contracts that will shield your business. 


Commencing a enterprise is fascinating, but it is significant to do it properly.  Since 2004, the lawyers of Normal Counsel, P.C. have aided 1000’s of small business clients with all of these challenges.  If you need help, make contact with us at or 703-556-0411.  Information and facts on General Counsel, P.C. can be obtained at our internet site (