What Legal Requirements Affect the Finances of a Small Business?
There are a number of legal requirements that businesses must comply with in order to officially establish their business. While an initial idea is the first step to building your business, the finances, and legalities of a business venture determine the future of that idea becoming reality.
As a small business owner or aspiring entrepreneur, the financial demands of a business startup are likely a challenge. That being said, legal support is hardly the place to start cutting your budget. Cutting back on the legalities of your business development has the potential to land you in some hot water that could in turn end up costing you even more.
As you build your business, soliciting legal support and advice is critical to ensure that your business is compliant with all regulations. Traditional law firms typically charge clients a set hourly rate for their services. Any time spent on your case or offering their professional advice and support gets billed at that hourly rate. As you can imagine, this adds up quickly. Our team at @VirtualCounsel does things differently. We partner with business owners and entrepreneurs like you and offer our services at a monthly rate. We won’t nickel and dime you by the minute as seen with other law firms. Our goal is to support your ventures to be successful and most importantly, legally sound.
While gaining the support of a legal professional, or team thereof, is an important step in establishing your business, it’s not the only financial obligation you can expect from establishing the legality of your business. Another legal requirement that’s going to cost you is establishing your business as an LLC or corporation.
There are a variety of options available to entrepreneurs when deciding how to establish your business entity. Each of which has various costs associated with them. For more on the pros and cons of each type of business entity, check out our blog post.
Each type of business formation has associated costs. It’s your decision whether to invest in a potentially more expensive option and reap the benefits that come with it, or pursue a less expensive option but have to deal with the potential disadvantages associated.
Once you’ve decided on your business’s structure, you’ll want to register its name as well. No two businesses can have the same legal name so it’s important that you timely register a unique name, not in use by another business, as well as pay all associated costs and fees required by your local, state, or federal government.
Depending on the type of business you have, you may need to obtain further permits and licenses. Some common permits and licenses that businesses may need include those required to sell liquor or firearms or complete actions include mining, drilling, or transporting. The Small Business Administration provides a full list of common business licenses that may be required.
Another initial legal requirement that will play a role in the finances of a small business is the need for business insurance. There is a wide variety of different types of business insurance that apply in various scenarios. While business insurance is highly recommended to protect your property, employees, intellectual property, and more, it is not technically a legal requirement demanded by all business owners.
In establishing a business, you can expect to experience a wide variety of necessary expenses. Startup costs may be allocated to hiring and onboarding staff, investing in equipment, materials, and inventory, and buying or renting property to utilize for business operations. One important financial investment not to forget, however, is the necessary finances associated with ensuring the legalities of your business operations. For more information and support from our team of legal experts, contact @VirtualCounsel today!