When you’re considering starting a business, you’ll already know there’s a lot of work involved. A lot of this revolves around the legalities of the process, which can feel overwhelming. There are plenty of legal requirements for startups to be aware of, after all.
It’s easy to see why this can get the best of so many budding entrepreneurs. You could feel this way already, and you might be feeling more and more stressed over it.
Knowing about some of the more notable of these is always recommended. That way, you can actually make a start on them and make sure they’re sorted. Since there can be massive implications if they’re not sorted, you’ve no reason not to put the work into them.
Five of these can be essential, and they’re more than worth diving into.
Photo by Mango Matter on Unsplash
Legal Requirements for Startups: 5 Top Picks
1. Getting Insurance
Every company needs insurance, and there’s a legal minimum you’ll have to go for. It’s an area you’ll have to invest in from the start, but that doesn’t always mean going for the legal minimum. It might be worth investing in something a bit more comprehensive from the start.
You’ll be much better protected in case anything goes wrong later on. While you wouldn’t want to be in a position where you need to use it, it’s more than worth it if you do. It could end up saving more than a few financial headaches in the future.
2. Trademarking Slogans & Logos
Every business needs a logo, and a slogan can always be a great addition to your marketing. You could already know to get them, but you shouldn’t overlook the legal side of them. Trademarking your slogans and logos is always recommended. It lets you make sure nobody else can use them.
If they do, you’ll have a legal path to take to rectify the situation. When you’re filing the trademark, you’ll even find out if something similar is already trademarked. This gives you the time to find something else to use, which helps you avoid being in an unfortunate legal situation later on.
3. Obtaining ID Numbers
You’ll already know you’ll need to register your business to start operating it. A lot of this revolves around getting specific identification numbers. State and federal tax IDs are some of the more obvious of these, but there’s more to it than that. You’ll also need an employer identification number, for example.
That means knowing when to apply for an EIN and other IDs when you need to. Thankfully, this doesn’t need to be nearly as complicated as most people assume. In most cases, it’s just a matter of filling out the right paperwork, and you should be good to go.
4. Getting Permits & Licenses
You’ll need a permit to operate your business, and you could need several licenses, too. While this depends on the industry you’re entering, it’s still worth looking into exactly what you need. Thankfully, there are ways to figure this out relatively easily, so you shouldn’t have a problem getting started with them.
Some of these will be awarded by your state, while others will be federal permits and licenses. Take the time to find out exactly which ones you need and make sure you actually get them. It’ll be time-consuming, but it’s a step you need to take.
5. Classifying Employees Properly
At some point, you’ll need to hire employees for your startup. There are multiple legalities involved in this, like having a contract in place and taking care of employee-related taxes. Then there’s how you’ll classify the people who work for you. You can put them into one of several categories.
The four main categories are: employees, volunteers, interns, and contractors. Make sure the category you pick matches up with what they actually are. There are legal differences between each of these categories, and you’ll face consequences if you don’t classify them the right way.
Legal Requirements for Startups: Wrapping Up
There are countless legal requirements for startups to be aware of and sort out. These can have massive implications for your business, especially when they’re not properly looked after. You could end up facing massive fines and the closure of your business.
Nobody wants that to happen, and it’s worth avoiding at all costs. This can feel overwhelming, though. By focusing on a few particular areas, though, you shouldn’t have much to worry about. Get them sorted from the start, and you’ll have much less to worry about.
