Starting a business is a huge undertaking, but some legal requirements are often overlooked. Keep reading to find out what you need to know before starting your own business.
Choose the Right Business Structure
When starting a new business, one of the first decisions you’ll need to make is what type of business structure to choose. This decision will significantly impact your taxes, liability, and paperwork requirements. So whether you have been wondering how to start an import/export business or fashion business, we got you covered. Here’s a brief overview of the most common business structures. A sole proprietorship is the simplest form of business organization owned by one person.
No particular forms or filings are required to establish a sole proprietorship, and it’s easy to set up and manage. The downside is that the owner is personally liable for all debts and liabilities incurred by the business. A partnership is a business owned by two or more people. Like a sole proprietorship, no particular forms or filings are required to establish a partnership, and it’s easy to set up and manage. Partnerships are also subject to personal liability for debts and liabilities incurred by the business.
A corporation is a separate legal entity formed by filing Articles of Incorporation with your state’s Secretary of State office. Corporations offer their owners limited liability protection from personal liabilities arising from the corporation’s operation. They also have many administrative formalities that must be followed to maintain their corporate status (e.g., annual meetings, corporate minutes). A limited liability company (LLC) is a hybrid entity combining corporate and partnership features.
LLCs offer limited liability protection for their owners (similar to corporations), but they are less expensive and easier to establish than corporations. They also don’t have all the administrative formalities associated with corporations (e.g., annual meetings, corporate minutes). If you are unsure which business structure fits your business or want more legal advice, make sure to contact a law office. And, if you are in New York City, take advantage of visiting a law office in Syracuse, NY.
Set Up Systems and Procedures
A new business must have systems and procedures to ensure the law’s compliance. The business owner should create a written policy manual outlining company policies and procedures, which should be reviewed and updated regularly. First, the policies and procedures must comply with state and federal anti-discrimination laws. This means that the policies cannot discriminate against employees based on race, religion, sex, age, national origin, or disability. Additionally, the guidelines cannot favor one group of employees over another.
The policies and procedures must also comply with wage and hour laws. This means that employers must pay their employees at least minimum wage and overtime if they work more than 40 hours in a week. Employees must also be given proper break time and rest periods. Finally, the policies and procedures must comply with health and safety laws. Employers are responsible for ensuring a safe work environment for their employees. This includes providing adequate safety training and equipment and enforcing safety regulations.
Along with systems and procedures, research what licenses and permits your business may need. Depending on your business type and what kind of products or services you offer, you may need licenses from the city or county in which you operate, as well as from the state government.
Create a Business Plan
You will need to develop a business plan to get approval from the bank or other lending institution if you need funding. A business plan is a document that outlines the goals and strategies of a business. The components of a business plan are an executive summary, business description, market analysis, product or service description, marketing plan, operations plan, financial plan, and any additional information. The executive summary is a brief overview of your business plan. It should include a short description of your business, target market, product or service, marketing strategy, and financial projections.
The business description should include information on the history of your business, the current state of your business, and your business goals. The market analysis is your target market, competition, and market share, and the product or service description includes a description of your product or service and your pricing strategy. The marketing plan describes your marketing strategy, including your target market, advertising and promotional strategy, and sales strategy.
The operations plan is a description of your business processes and your human resources plan. The financial plan includes your startup costs, monthly expenses, sales projections, and financial projections. An additional information section includes other relevant information to your business plan. This could include information on your company structure, ownership structure, insurance, licensing information, or website address.