Presentations made painless

Blog > 7 Legal Questions an Entrepreneur Should Answer Before Starting a Business

7 Legal Questions an Entrepreneur Should Answer Before Starting a Business

Published: Nov 25, 2022

What business entity best suits my company?

When determining which entity is the best fit, it's important to consider who will be running the business. In other words, it's important to identify the people who will be making the business decisions and what their roles will be. For example, will you be the only person who makes the decisions, or will there be a board of directors or other people who have a say in the direction of the business?

There are four main types of business entities: sole proprietorships, partnerships, corporations, and LLCs. Sole proprietorships and partnerships are the most common types of business entities, and they are often chosen because they are the easiest to form. However, they also come with certain risks, such as unlimited liability. Sole proprietorships and partnerships are also not recommended for businesses that plan to raise money from investors. Corporations and LLCs are more complex to form, but they offer protection against certain kinds of liability. If you are planning to raise money from investors, it's a good idea to consider forming an LLC or a corporation. If you have any questions about which entity is best for your business, you should consult with a lawyer or an accountant.

Do I need to obtain any licenses or permits to operate my business?

The answer to this question really depends on the type of business you're planning to open. In some cases, you may need to obtain a license or permit from your local government. For example, if you plan to open a restaurant, you'll need to get a food service license. If you plan to open a childcare center, you'll need to get a license from the state.

So before you open your business, it's a good idea to check with your local government to find out what licenses or permits you may need. That way, you won't run into any surprises down the road.

What legal protections do I need to put in place for my business?

There are many legal protections that every entrepreneur should consider having in place, but I think the most important one is a registered business name. This is because a business name serves as proof of ownership, and helps you avoid legal disputes.

If you don't have a registered business name, it's very easy for someone else to register the same name, which can lead to a lot of problems. So, it's important to register your business name as soon as possible. This will protect your brand, and make it much easier to open a bank account and hire employees.

What type of insurance do I need for my business?

"If you're a business owner and you haven't considered disability insurance, you're making a big financial mistake," says Arianna Simpson, founder and CEO of Golden Seeds, [a venture capital firm](https://pitchgrade.com/modes/venture-capital-funding-presentation-ai-review-tool) that exclusively funds female entrepreneurs.

"Disability insurance is crucial, especially for women," says Simpson. >"Women live longer than men, which means that for a longer time, they're not going to be earning an income."

"We're all vulnerable to unexpected illness or injury. For this reason, disability insurance is a crucial part of any financial plan," says Amanda Becker of Fidelity Investments. >"If you become disabled and can't work, this insurance can help you pay your bills and other expenses while you're recovering."

Do I need to register my business with any government agencies?

As an entrepreneur, you should consider registering your business with the IRS. You will be required to file an annual tax return known as a Form 1065. This information is important to a number of agencies, including the SBA. You may be eligible for special loans from the SBA when you file your 1065. The IRS is another great source of information for your business. They offer a number of helpful publications that can guide you through the ins and outs of running a business. For instance, they offer one that explains how to deduct expenses related to your business. The IRS also offers free e-tools to help you determine if your business is profitable

Do any of my business activities violate any laws or regulations?

If you believe that your business may be in violation of any laws or regulations, it is important to consult with an attorney who specializes in that area of law. Not only will an attorney be able to advise you on your specific situation, but they can also assist you in creating and implementing a plan to rectify the issue.

What are my obligations under any contracts I have with suppliers, customers, or other businesses?

It's an unfortunate reality that startup founders are often forced to part ways with their company. Whether it's a result of a bad product and/or market fit, or a lack of funding, founders are forced to either shut down or force out the founder. When this happens, it's imperative that the founder is aware of their contractual obligations. Even if the founder is no longer with the company, their name, signature, and reputation could be used against the company to prove that they were in breach of the agreement, regardless of whether they were still with the company at the time of the breach. Therefore, it's important that founders educate themselves and be aware of their contractual obligations before signing any agreement, and to make sure that they are aware of their responsibility if they are no longer with the company.

Want to create a presentation now?

  • instantly

    Instantly Create A Deck

    Let PitchGrade do this for me

  • smile

    Hassle Free

    We will create your text and designs for you. Sit back and relax while we do the work.

Explore More Content