Here are 3 Legal Considerations Before Launching A Business…

1. The cost

It’s exciting to have an idea for a business but consider the cost of launching if you don’t have a real marketing plan.

This isn’t to discourage you but to help you consider the costs of a business.

Costs to consider:

Opening the business: Incorporation fees
License and permit fees
Annual fees to maintain your business registration
Closing the business
Capital needed to run your business

This is money? How is that a legal consideration?

I’ve had clients who launched and life happened. So while the business was registered, they were not making money and neglected to pay the $300 yearly tax in Maryland. When they were ready to try again, they had to pay $600+ in taxes and penalties just to get the business back in good standing to do business.

Others have failed to pay the tax and their business was forfeited (taken back by the state and registration cancelled).

Count the cost… there are legal consequences if you don’t.

2. Choose the right entity

Choosing the wrong entity or legal structure could mean more paperwork and more taxes.

There are pros and cons of each and it depends on your business for what works best for you. Whether sole proprietorship (solo), LLC, partnership, or corporation.

Just so you know... sole proprietorships and partnerships don’t offer personal liability protection to their owners (you’re on the hook for the business debt).

3. Choose the right name

A brand is as powerful as its name.

Many have launched with a beautiful name only to get smacked, legally speaking, with a cease and desist letter. The threat of being sued and unable to fight back meant rebranding. That also meant losing out on all the work and money they put into naming their business, product, or service. Imagine having to reprint 200 bottles with your new brand and throwing away the old 250 in storage.

Ouch.

Consider these 3 before you launch and save yourself the heartache.

Want to launch safely? Enroll in the Start-Up 101: Foundations Bootcamp here.

You’ll learn how to avoid the top 3 above and step-by-step launch your business.

Disclaimer: This post is for educational purposes only and is not legal advice. Please consult an attorney.