Deena Fischer

E-Business Law Group / Just1Group - Managing Partner/ Principal and CEO
Yardley, PA

    The Top Ten Legal Issues You Need To Know About When Starting Your Business.

    March 24, 2009

    As the Small Business Superhero that I am (LOL!), I often consult with potential clients that are just starting up.  I go through all of the various issues that could confront a business like theirs and help them to develop a plan to address those issues. 

    But many businesses start up without adequately protecting themselves, their businesses and their families.  Whether that's because they don't have a lawyer to advise them or because they don't choose the "right" lawyer to advise them, I'm not sure.  But it happens. 

    I was asked last week in the Legal Issues Café here at Savor the Success whether there's a "Top Ten" list of legal things that businesses should know before they start up. 

    I'm not sure that my opinion would be the same as any other lawyer's opinion, but hey, I was asked.  Here's my list (You might notice that I cheated a little with subparts, but I couldn't stop myself):

    1. Spend the time and the money to set your business up properly.

        a. Pick the right business form for you (i.e., sole proprietorship, partnership, limited liability company, corporation, etc.).  More on this topic;

        b. See if you need to have federal, state or local licenses to run your business (and if you do, get them);

        c. Adequately insure your business;

        d. Talk to an accountant about what is and isn't tax deductible, what kind of recordkeeping you need to do, how long you need to keep records and what records need to be kept, etc.;

        e. Check with your state about when and whether you need to collect sales tax and how to obtain your wholesale license;

        f. Make sure that you timely file your company paperwork properly with the Secretary of State and that you do all of the other things that you need to do to maintain your corporate shield.  More on this topic.

    2. Protect your intellectual property

        a. Trademark - Use the TM indication when using your brand name or logo to give notice that you hold a common law trademark on the name or logo (even if you don't have the money to file your mark with the USPTO).  More information on this topic;

        b. Copyright notices - Make sure that you put a copyright notice on everything that you write or create.  It has copyright protection from the date that you create it in a tangible medium of expression. Copyright notice isn't required by law, but is a good idea.

    3. Make sure your website is ready.

        a. Terms and Conditions - Your Terms is your "contract" with your customers and sets forth all of your policies and protects you from liability.

        b. Privacy Policy - A privacy policy is required by California law.  You're required to have one if you collect any personally identifiable information from visitors from California on your site. More on this topic;

       c. Disclaimers - If you talk on your website about results (financial or business related), you need to have an earnings disclaimer.  If you use testimonials, you need to disclaim that results are not typical, etc.

    4. Get your agreements in order

        a. Agreements with your business partners (i.e., partnership agreement, operating agreement, shareholders' agreement, bylaws, etc.

        b. Make sure you have agreements with your vendors and clients that really spell out the terms of your agreement.

        c. Make sure you know the difference between employees and independent contractors and that you have agreements in place if you're using independent contractors.

    5. Laws regarding email marketing communications with customers (Keep track of opt-in and SPAM Laws) either from your own list or partnering with another company.  More on this topic.

    6. If you publish online content that other people provide, you need to familiarize yourself with the safe harbor provisions for publishers under the Digital Millenium Copyright Act and follow them.  More on this topic.

    7. Keep track of which government entities have which addresses for you and make sure that you change them appropriately.

    8. Open all your mail to keep track of corporate deadlines but don't believe everything you read.  There are lots of companies that get your information when you file your company and/or trademark or copyright and they send you mail that sounds official.  It's usually not.  If you get one where you can't tell, drop me an email.  I'm happy to tell you.

    9. Don't run contests or giveaways without familiarizing yourself with the rules for each state and complying with them.  Don't forget to have official contest rules that comply with all applicable laws.  See more on this topic.

    10.  I know that this one sounds like common sense, but please, please, PLEASE READ all of the agreements that you enter into.  That includes your hosting and domain name registrar agreements, your vendor agreements, your partnership agreements, etc.

    I know this sounds like a lot of information, but knowing these things is part of the homework that you really need to do to protect yourself, like market research or product development. 

    If you have any questions or need more information on any of the points above, I'm always happy to take them (and any other legal questions) in the Legal Issues café.  I hope you feel that this better prepares you to protect yourself, your business and your family.

    Read Deena's other blog entries >

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