It has never been easier to start your own business. There are thousands of websites, services, and resources available online for you. But it’s important to protect your business as you grow. Here are 5 small business legal tips for starting and protecting your new business.
Protect Your Personal Assets
It’s extremely important to separate your business assets from your personal ones. 45% of businesses fold within the first five years of opening, and 65% in the first 10 years. This isn’t meant to discourage you, only to underscore the importance of making sure your personal assets are protected and separated from your business assets in the event of a closure.
There are a few different ways to protect your personal assets. The first is to create an LLC or other legally-recognized business class. This limits the degree to which you, as the business owner, are liable for damages incurred by customers. This is the best way to protect your business in the event that a customer tries to sue you after a bad experience with your product or services.
Another way to protect personal assets is to set up a separate bank account for your business finances. Even if you just have a small craft shop, or you only do business locally, it’s important to keep your personal finances and your business accounts separate in the event of theft, fraud, or a failing business.
Check Trademarks & Copyrights
Before you get too stuck on a business name, you should check to make sure the name doesn’t violate an existing business trademark. Business cards, websites, social media pages – all of these things need a legally legitimate name to be able to operate your business. Here’s how to find out if a business name is taken.
It’s also important to apply for trademarks and copyrights to protect the integrity of your business. You don’t want another person or business with the same name creating confusion when potential customers are looking for your products or services.
Having a paper trail is important, and an easy way to do that in business is to create contracts for your products and services, especially if the services include some collaboration or partnership being created, even for a short time.
This protects you and your business, while also letting your clients know what to expect from you.
Pay Attention to Your Online Presence (Business & Personal)
In the age where everything is recorded and on the internet forever, it’s increasingly important to audit your business and personal online presence (social media, mentions, affiliations).
As a small business owner, your personal reputation is tied to your business reputation, and vice versa. You never want to alienate specific customer demographics by posting or sharing things that may paint you or your business in a negative light.
Include Legal Documents on Your Website
Having an online presence, even if your business isn’t an online business, is extremely important. More and more customers do research and their own version of background checks online when they are considering working with or buying from a new business. A company website is the best way to legitimize your business to online shoppers.
Please note: the opinions expressed here are simply best practices gleaned from research, and should not be considered legal counsel or advice.