Forming a new business is a challenging and exciting process. Putting the time and effort into the formation process will help set the tone for a sustainable and prosperous business. Below is a brief list of some of the first steps you will need to take, from a legal perspective, in order to start off right.
CREATE YOUR BUSINESS PLAN
The first step in creating your new business is often to compile all of your ideas and goals into one comprehensive business plan. Your plan is a unique roadmap that will help guide you in forming and running your company during those first critical years. Sections that you may want to include are: the business purpose, marketing plan, an analysis of the competition, operating procedures, employment needs, insurance needs, financial data including a balance sheet, pro-forma income projection, a three-year operating budget, and copies of all documents that you create during the start-up phase such as your licenses, articles of incorporation, and bylaws.
DEVELOP POLICIES
The beginning stage of any organization is a critical time to develop policies that the organization will utilize in its decision making process. Policies should include: conflict of interest, employment, director and officer compensation, ideological or social entrepreneurial values, organizational ownership and management.
INCORPORATE
The first step in the incorporate process is deciding upon a name for the business and performing a name availability search to ensure that the name is not already in use in the location where you will be operating. Second, as a business you will need to determine what type of entity to form - whether it's a corporation, LLC, PC, LLP, L3C, Benefit Corporation, sole proprietorship or partnership. Choosing the type of entity will depend upon the purpose of the organization and the tax and legal status of its owners and stakeholders. Once the entity type is chosen, the next step is to draft, ratify and file the appropriate documents with state and local agencies and draft either Bylaws or an Operating Agreement.
PROTECT YOUR INTELLECTUAL PROPERTY
In a competitive world, it is important to assess whether it is necessary to protect your brand and products with trademarks, copyrights or patents. It is also important to ensure that your new business does not infringe upon other companies protected rights.
ENSURE COMPLIANCE WITH LOCAL, STATE AND NATIONAL LAWS
Finally, your new business will need to ensure that it is in compliance with all applicable laws including: employment, wage and hour laws, licensing requirements, zoning regulations, tax reporting and withholding laws.
At the Law Office of Becki Kammerling, we can assist your organization with every step of this process. Contact us today for an initial consultation. Also consider our Tax-Exempt 501(c)(3) Start-up Check List.
