Joined Dec 27, 2015
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Legal Considerations When Starting a Business

Every entrepreneur aspires to launch a business that will lead to long-term success. Legal requirements are a critical element to consider when starting a business. However, most people are willing to risk it all by starting a business without following the legal process. Apart from having a viable business idea and a good plan, there is a variety of legal issues that you need to put into consideration. Below are some legal concerns you need to address before starting a business.


  1. Business structure

The first step in establishing a business is determining the legal structure. Some of the most common legal structures include partnership, sole proprietorship, etc. There are certain factors that you will need to consider when selecting the business structure. For instance, the amount of control you intend to have. The legal structure determines the type of license and permits to acquire and also tax considerations.


  1. Agreements

Apart from the sole proprietorship, most of the other legal structures require agreements to stipulate the rights and obligations of the parties involved. The agreement should contain a non-compete clause that prevents the sharing of sensitive information to competitors. Additionally, it is also essential to include a buy-sell provision that indicates the procedures for distributing interest of the parties involved. This ensures the business continues even if one of the partners departs. Also, a business that deals with vendors should consider non-disclosure agreements to prevent sharing of information to third parties.


iii. Intellectual property

If your business is involved with new products and ideas, you should consider intellectual property protection through patents, trademarks or copyrights. The US Patent and Trademark Office (USPTO) was established under the Department of Commerce to issue patent and register trademarks.


Patents and copyrights provide the business with the rights to use the products and services. In the event of infringement by other individuals or businesses, you can file a lawsuit in the court of law.


  1. Employment law

Employees provide a critical role in the success of the business. Therefore, business owners should familiarize with the various rules regarding employment. For instance, the Civil Right Acts of 1964 indicate that it is illegal to discriminate against employees based on color, race, gender or religion. Additionally, the Employment Act makes it illegal to discriminate against employees above 40 years. Also, the Americans with Disability Act protect individuals living with disability from discrimination and harassment in their places of work. Other employment laws include medical leave, equal pay, etc. Employers must also comply with wage and hour laws when compensating employees. For instance, the Fair Labor Standards Act stipulates a minimum wage of $7.25 per hour and even over time. Every state has laws regarding minimum wage


  1. Liability lawsuits

Most brick and mortar business are faced with liability lawsuits from customers, vendors or even employees. As a business owner, you have the responsibility of taking care of everybody in the premise. Accidents are inevitable and can occur due to wet floors, broken stairway, etc. Therefore, it is necessary to protect your business from lawsuits by obtaining liability insurance. The insurance company handles compensation of the victims on your behalf and also caters for the legal fees in case of a lawsuit.


In conclusion, due to financial constraints, most entrepreneurs are tempted to ignore legal issues when starting a business. However, they only consider help when trouble arises. An attorney will help you with the all the necessary legal documentation and advice required to start a business.


For entrepreneurial legal services, contact utah trademark attorneys. They will help you properly start your business and navigate all legal hurdles.


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