As a new business, you want to make sure you’re doing everything you can to be successful in an ever-changing landscape. From what consumers want to how to beat out competitors, it’s always good to stay one step ahead. The same goes for the legal side of your business too. In order to protect your rights and your brand, business owners need to be properly equipped to navigate all the legal know-how that comes with starting a business. Part of what can help you do that is seeking legal advice from people that know all the ins and outs: attorneys. Attorneys help you manage the risks of being a business owner and can advise you on whether your business should be a corporation, an LLC, or something else.
They can also help you define your relationship with your co-owners, review leases, and set you up with the right kinds of contracts and forms, according to LegalZoom. Another person that’s always good to look to for advice is someone who has been in your shoes as they can often share what they did or didn’t do to help you get a better sense of how you can seamlessly get your business running. At BlogHer’s recent Creators Summit, Cynthia Andrew, a travel and lifestyle blogger and creator of Simply Cyn, along with, Jennifer Filla, an independent network attorney with LegalZoom, shared their advice on how businesses can arm themselves with all the legal essentials they’ll need to succeed.
Get your entity established
“You want to make sure you’re getting your entity established,” says Filla. “Whether that’s an LLC or a corporation, you want to make sure you’re establishing some kind of separation between your business and you personally. That’s going to protect your assets from any kind of liability that comes with your business and vice versa in that it will also protect your business from any kind of liability that would come at you personally.”
Andrew, who is also an attorney, agreed, adding that she had to learn the hard way that it was time to become an LLC. “For a long time when I started blogging, because I did feel the risks and the liability with it were pretty low, I was just a sole proprietor,” she says. “But something did happen — sometimes you don’t realize exposure until it happens — and that was the moment where I said I really need a separation and I need to be an LLC.”
Another legal essential Filla recommends is insurance. There are several types of business insurance, each designed to protect against a particular set of risks. The most common type of insurance — and one new businesses should definitely keep in mind when starting — is liability insurance. This type of insurance covers your obligations and legal defense for accidents, injuries, and negligence. Contrary to popular belief, home-based businesses need liability insurance because homeowners’ policies do not protect against business liability risks. Other types to consider are professional liability and product liability insurance.
“Trademarks are also really important,” says Filla. “Especially in this day and age of the internet, as most of our businesses are either conducted on the internet or significantly marketed on the internet. When you set up your business entity — that corporation or that LLC — you do get some name-brand protection from the state you’ve incorporated in, but it’s only in that one state, so if you’re going to have that internet presence, marketing and brand, then you’re really going to want to have a trademark to protect the brand you’re creating.” Filla adds that for a business getting their feet on the ground (or for any business in general), it would be terrible to put your time, effort and resources into this brand, only to find out someone else has the name trademarked and now they’re coming at you because you unintentionally used the same name and now you’re stuck rebranding.
Invest in an accountant
Last, but certainly not least, Filla says that a new business should establish a relationship with someone who has some tax expertise and who can talk to you about how to structure your billing and your books for the way your tax reports are going to look at the end of the year. And if you do your own taxes, keep in mind that a good accountant can do more than prepare your tax return in a way that minimizes your taxes. They can also talk with you about the past year and where your business is headed, and recommend new tax strategies or alert you to the tax consequences of future plans.
This article was created by BlogHer for LegalZoom.