Finding A Way.

Countdown To Launching Your Business

Countdown To Launching Your Business: Key Legal Safety Checks

In this post I aim to give you an overview of some important steps on the road to protecting and growing your company’s true value. Not all of them need to be completed right at the start, but being aware of them can help you develop an action plan to avoid pitfalls later on—when you should be spending most of your time on growing your business and taking it to the next level.

Select a Business Name

Any business name should be legally cleared before its first use. This includes, but is not limited, to:

  • Checking the availability of the name with the secretary of state for the jurisdiction in which the business will be incorporated, as well as the jurisdiction(s) where the business is expected to sell its products.
  • Performing a trademark search for the name locally and federally.
  • Conducting a “Google” search to determine whether the name, or similar name, is already being used.
  • Verifying whether the name is available with internet domain name registrars.

Based on the outcome of the efforts above, you may choose to engage an outside vendor to conduct a more comprehensive search.

Once the name is cleared, you should file it with the secretary of state, register it as an internet domain name, and, depending on your situation, file an application for trade or service mark registration. You may also want to consider fictitious name registrations (DBAs). In that context, you may already be starting to consider registration in other states where you plan to conduct your business.

Select the Appropriate Legal Structure

Of the myriad decisions you will make for your new business, this is the most important. It will impact management, liability, taxation, financing, incentive compensation, and other key issues. Common types of entities are limited partnerships, limited liability companies, and corporations. There is always the option of not forming an entity at all and functioning as a sole proprietor instead—which I generally advise against. That will be the subject of a separate post.

Acquire and Protect Your IP

Your business will invariably develop Intellectual Property (IP) in building, growing, marketing and selling its products and services. IP assets include trademarks, copyrights, trade secrets, and patents. It should be non-negotiable that all IP developed by founders, independent contractors, and employees is actually owned by the company—and that ownership is properly documented. You can be 100% sure that any investors, especially venture capitalists, will examine the provenance of your IP with due diligence. You don’t want to raise any red flags or be forced to negotiate with the creators of the IP after the business has launched.

Obtain the Appropriate Licenses and Permits

  • Federal, state, and municipal laws may require that your business obtain various permits and licenses.
  • You will also need to apply for an Employer Identification Number from the Internal Revenue Service for tax-filing and identification purposes and such things as opening a bank account.

It is beyond the scope of this post to talk about insurance and issues related to recruiting and hiring. I promise to cover these and many more topics in future posts, but in the meantime send me your questions about forming your new business!

Eckerle Law offers a highest-quality and cost-effective alternative to the traditional law firm model for a wide variety of transactional and regulatory matters serving all your business law needs. Our experienced attorneys also provide a full range of compliance services for investment advisers, offering compliance tools that are tailored to fit the ever changing regulatory landscape as well as your business needs.

If your company would like to strengthen its business practices, please contact us today so we can leverage our experience to create real-life business and legal solutions to help your business thrive.