Starting a Business? Don’t Forget About These Key Legal Considerations
Starting a new business is a hectic and exciting time. You’re bound to have your plate full, so the last thing you need is legal troubles added to the mix! It’s incredibly important to get the legalities right from the beginning when it comes to your new business to avoid any mistakes that may bring up issues down the road. Read on as Heritage Law outlines five important, but often overlooked legal considerations that will keep your business running safely (and legally).
1. Business Structure
Choosing the right business structure is important and will have long lasting implications for the life of the business. Four of the most common business structures are:
- Sole proprietorship
Each of these structures come with different costs and tax implications. Your lawyer can discuss the pros and cons of each structure and help you make the right decision. At the very minimum, you’re required to obtain a business license as well as a tax registration to ensure you are operating your business legally.
2. Put it in Writing
Written agreements may seem like overkill in the beginning, but they become extremely useful in the event of a dispute between partners or employees. Common written agreements you may want to consider include:
- Founders agreement: Outlines the roles and responsibilities of all business partners, including what will happen in the event that one partner chooses to leave the business.
- Non disclosure agreement (NDA): Anyone who signs an NDA is required to keep any business information discussed or disclosed confidential. These documents are useful for employees, investors or vendors.
- Employment agreement: Outlines the roles, responsibilities and obligations of both the employee and the employer. Non-compete provisions are common in these agreements, which prevents the transfer of sensitive business information if an employee leaves the company for a competitor.
Your lawyer can help you in drafting these documents and making sure they are tailored to your unique business circumstances.
3. Intellectual Property
Intellectual property is one of the main assets that business owners often underestimate and therefore fail to protect. Intellectual property can include:
- Brand name
- Domain name
- Recipes you’ve created
- Trade secrets
In today’s marketplace, brand means everything. If you are planning on introducing a new or innovative product or service into the marketplace, it’s in your best interest to make sure it’s protected from future competitors.
4. Employment Law
As an employer, it’s your responsibility to make sure you are informed about, and are in compliance with all municipal, provincial and federal employment laws. This includes discrimination laws, wage and hour laws, and occupational health and safety standards. This is where a comprehensive employment agreement comes in handy as it will outline the standards of work an employee can expect.
5. Liability Insurance
If your business is going to have a brick and mortar location that customers can visit, you’ll want to make sure you have the proper liability insurance in place to protect your business from lawsuits resulting from slips, trips or falls. Your liability insurance will not only cover any damages, but it can also cover legal costs associated with defending any claims.
If you’re starting your own business and have any questions about legalities, contact the team at Heritage Law to schedule an appointment today!