What legal steps should you be aware of before starting your business?

You’ve found the idea that’s going to work, you’ve conducted market research, and you’re ready to launch into the world of entrepreneurship. Now you need to legally formalize your project. The legal steps involved in formalizing a business plan can seem complicated, but this article will offer you some tips for navigating them and successfully completing your project.

Whether you’re considering starting a sole proprietorship or partnering with others, Womenpreneur will guide you through six essential legal steps for starting your own business.

Choose a name!

This step may seem simple and logical, but it is also one of the most important.

The brand you choose will represent your business and its values; you’ll need to find a name that’s neither bland nor overly flamboyant. A name that strikes the perfect balance.

Once you’ve created the perfect business name, you need to ensure it’s legal in your area or industry. Two businesses with the same name can lead to legal disputes and confusion. To avoid this, do an initial online search for similar names. Government agencies often maintain databases of business names, which you should check to ensure your business name is legitimate.

Check if you need a permit

Depending on where you’ll be working and/or the nature of your business, you may need a permit or authorization to set up and start your business.  Without proper authorization, you may not be able to start your business!

Decide on your business structure

The structure you choose for your business will depend on the stakeholders involved and your vision for the future. There are many different structures depending on where you operate, but first, you need to determine whether you prefer to have sole ownership of your company or to operate jointly and therefore have shared responsibility.

The structure you choose will affect the amount of responsibility and control you have over the business and the amount of taxes you will have to pay. It will also have consequences for the company’s development. Choosing the most suitable legal structure can be tricky. It requires a lot of thought and planning, but it is very important to discuss the possible options with the stakeholders involved to avoid any legal disputes. The advice of a notary or employment lawyer can be useful for this step.

Take out insurance

Whether your business involves hazardous processes or not, you must manage your company’s risks by taking out appropriate insurance. It’s advisable to take stock of the potential risks you’re considering when you start your business so you can choose the best insurance.

Write detailed contracts

When hiring employees and/or working with suppliers, you’ll need contracts that comply with the legal requirements. Even if you’re a solo entrepreneur, it’s important to have written records of your employment status and the compensation you receive. Hiring a labor lawyer or notary to draw up contracts that will benefit both you and the signatory isn’t necessarily necessary, but it can be beneficial!