Have a great business idea that you need to put into action? Over the last few decades, startups have taken over, and some of the best are not limited to tech startups. They are in every industry, from health (e.g., Devoted Health) to consumer and retail (e.g., Juul Labs), e-commerce (e.g., goPuff), artificial intelligence (e.g., ByteDance), financial tech (e.g., Stripe), supply chain (e.g., Instacart) and more. Getting started with your startup business, however, is the hard part. Some laws and regulations must be followed. Getting it right can mean either a solid foundation from which your company will grow or a rocky foundation from which it may fail.
At Dohrwardt Law Firm, I want your startup to grow. I can help you get established with the best business structure for your idea while also meeting all your legal obligations to help you avoid future fines or potential lawsuits. Contact the Dohrwardt Law Firm to discuss how I can help.
Startups and the Importance of Business Structure
One of the first and most important decisions when setting up your startup is which business structure to use.
The main business structures to choose from are:
- Sole proprietorship. The most straightforward and affordable business structure to set up, a sole proprietorship is a single-owner business. It may suit solopreneurs and consultants conducting low-risk business activities.
- Partnership. A partnership is owned by two or more partners whose personal liability depends on the type of partnership set up (general, limited, or limited liability (LLP)). LLPs are often helpful for lawyers, financial advisors, and accountants.
- Limited liability company (LLC). An LLC combines the features of a sole proprietorship or partnership and a corporation. The structure suits a range of medium to high-risk small businesses seeking a simpler alternative to incorporation.
- Corporation. A corporation has a separate legal identity from its owners, limiting their liability. However, corporations are expensive and complex to set up and run. Incorporation may attract startups requiring large amounts of venture capital or maximum liability protection.
The structure of your startup has long-term legal, financial, and tax consequences, so it's essential to choose wisely.
Startup Legal Services
You can get a lawyer to help you when setting up your startup.
Choosing a Business Structure
The Dohrwardt Law Firm can explain the business structures available, the pros and cons of each, and which may be the best choice for your startup. I can also advise you of city, county, state, and federal regulatory requirements, such as licenses, permits, and professional registration.
Drafting Initial Documents
There's a lot of paperwork involved when starting a new business. The Dohrwardt Law Firm can draft all the necessary initial documents, including:
- Partnership agreements
- Operating agreements
- Articles of incorporation
- Investment agreements
- Employment contracts
- Service contracts
- Website terms and conditions
- Privacy policies
- Software as a Service (SaaS) agreements
- Venture financing documents
Reviewing Contracts
In addition to preparing contracts for you, the Dohrwardt Law Firm can review and advise you on any business contracts prepared by third parties, like clients, suppliers, or landlords (e.g., commercial leases).
Protecting Your Intellectual Property
A lawyer can assist you with patent, trademark, and patent applications to protect your business's intellectual property.
Providing Ad Hoc Advice
There is a range of other legal issues that can arise in the course of setting up and running a startup business. These include tax, capital raising, and employment issues, like determining employee stock options and termination. The Dohrwardt Law Firm is ready to assist you with these questions.
Identifying Any Legal Risks
Once the Dohrwardt Law Firm has an overview of your business and what it does, they can identify and explain any legal risks or potential issues that may arise. I can advise you on how to avoid them and best protect your business.
Making Sure You Comply with Regulatory Laws
The government regulates the activities of businesses, including startups. Five main areas of law can be significant and could impact your startup. These five core areas include:
- Advertising restrictions (to protect consumers)
- Employment and labor laws (to protect employees, provide safe working conditions, etc.)
- Environment regulations (to protect the environment)
- Data security and privacy protection (to protect sensitive data and other information collected from employees, customers, clients, business transactions, etc.)
- Safety and health (to protect employees from unsafe work conditions, etc.)
The federal, state, and local governments regulate these five areas. The layering of laws and regulations can make compliance more difficult, but the Dohrwardt Law Firm knows the laws and regulations and will ensure compliance.
Five Factors to Consider Before Starting a Business
Starting a business can be risky without adequate planning and due diligence. There are many issues to consider before setting up your company, and here are just a few.
1. Nature of your business
Clearly outlining the nature of your business helps guide many of the choices you make when starting a business, such as choosing a business structure. This includes identifying the product you are selling, the service you're providing, your target audience, and where the business will be based.
One of the best ways to think through these issues is in a detailed business plan.
2. Business structure
The best structure for your business depends on various factors, including the number of owners involved and how the business will be funded. Its structure will determine the business' tax obligations and the personal liability of its owners, so it is crucial to take time to consider the issue.
3. Capital
When starting a business, one of the biggest questions is how it will be funded. Are you investing it personally from savings or via a business loan? Are family members contributing, or will you seek external investment?
4. Employees
Will your business need to hire employees? If so, you must factor salaries and other compulsory employee contributions into your financial planning. Please familiarize yourself with the relevant federal and state employment laws.
5. Compliance
There are also various state and federal regulations on businesses (as already noted), depending on the business structure and its activities. Understanding all these compliance requirements, such as registration requirements, financial reporting, and other record-keeping obligations.
The Dohrwardt Law Firm can advise and guide you on many of these issues.
Contact a Business Startup Lawyer in Minnesota & Texas Today
At Dohrwardt Law Firm, I want to help you start your business from its conception. The Dohrwardt Law Firm will get your company up and running quickly. I will ensure your startup is appropriately structured for efficiency and to minimize risk. I will make sure your business complies with all relevant laws and regulations. I will provide the legal services you need to succeed.
Please contact the Dohrwardt Law Firm how I can help you get business done. I look forward to creating a productive business relationship.