Legal Protection
Legal Protection for Small Business Owners
You’ve reached the landing page for all things legal protection and risk analysis for small business owners and new entrepreneurs. Not finding what you need? Email Hello@startupheartup.com with questions or concerns.
There are two major areas to consider for legal protection:
Protecting Your Assets (Business Structure (LLC, etc) / Risks & Liabilities / Contracts / Intellectual Property)
Complying with Applicable Law (Taxes / Legal Compliance)
Basic Legal roadmap
for new small businesses
START HERE!
—> Choose & clear your Business Name (to build a strong brand & trademark potential).
—> Obtain a PO Box (for increased security for your personal information and your business mail).
—> Get Business Insurance (check out this handy guide!).
—> Register your business with your state’s Secretary of State website (we generally recommend LLC, but this is up to you! Read more below).
—> Obtain your Federal EIN (via IRS website).
—> Using your FEIN, open a Business Bank Account.
—> Obtain required business Licenses & Permits.
—-> If required, obtain your State Tax ID or Seller’s Permit (via your state’s Dept. of Revenue/Taxation website).
—> Put legal Contracts and Policies in place (check out my contracts landing page).
—> Keep track of Business Expenses.
—> File Federal, State, & Local Taxes.
YOU’RE DOING AMAZING!
Download our small biz legal roadmap with more details below:
“Lawyers and legal experts can help a business owner understand and address the risks of activities relating to the business.”
Choosing a Business Structure
What are the benefits of each business structure? Why form an LLC? Why form a corporation? Click HERE for answers to these questions & more.
Common Options to structure your new business (& what you’ll need to make it happen):
LLC (Limited Liability Company)
Often a good choice for new & small businesses.
Provides both protection from personal liability and pass-through taxation (i.e. you can file your biz profits & losses on your personal tax return).
You can file this yourself!
Corporation
Extensive paperwork & upkeep; more expensive than other options; taxed separately from you (the person).
Not recommended to file on your own.
Potentially good option if you plan to take on money from outside investors.
Sole Proprietorship
Does NOT provide any protection from personal liability.
Partnership
Does NOT provide any protection from personal liability.
Sign a partnership agreement for 2+ partners of the business.
Read more about the what, why, and how of LLC’s (including electing to be taxed as S Corp) HERE.
Assessing Risk & Liability
For questions every entrepreneur should ask about the risks & potential liabilities of their business.
Key Areas of Risk to not overlook
Products Liability
Loss of Your Intellectual Property Rights
Infringement of Others’ Intellectual Property Rights
Business Insurance
Employment Law
Compliance with Regulations
Fraudulent Payments
Violation of Legal Contracts
Not Paying Your Taxes (See more on taxes BELOW!)
Taxes
Federal, State, & Local
The tax roadmap for typical early stage small business owners:
Keep track of all expenses of the business.
Register your business with the State you live in / operate the business in. (Read more about choosing biz structure HERE.
Obtain your State Sales & Use Tax ID (if applicable).
Keep track of all income of the business.
File Federal & State Taxes.
Taxing of Sole Proprietorships & LLC’s:
The profits and losses resulting from your small business (SP or single member LLC) will generally “pass through” to your personal tax return. In this case you will file your personal tax return and address the business’ finances on Schedule C / Form 1040 and Schedule SE (Self-Employment Tax).
For Independent Contractors (or Businesses Paying Independent Contractors): Read more HERE.
Read more & download the specific forms on the IRS website: HERE.
Everything you need to know about collecting & filing State Taxes:
This State-by-State landing page from TaxJar organizes & spells out the requirements for each State's sales tax requirements, including for example:
(1) Do you or don’t you need to collect Georgia (or other state) sales tax?
(2) Which customers do you collect from?
(3) How much do you collect?
(4) What do you do with all the sales tax you’ve collected?
(& much more!): https://www.taxjar.com/states/
Taxes on Wholesale purchases:
Resale / Reseller’s Permit: If you’re starting a retail business (whether online or at a brick and mortar location), you’ll want to apply for a reseller license. A reseller license certifies you don’t have to pay sales tax when buying products on a wholesale basis for the purpose of reselling them to customers. In some states, a reseller license might alternately be called a reseller permit, resale license, resale certificate, sales tax permit, or some other term. Regardless of its name, its purpose is to identify your company as a reseller. Read more HERE.
Industry-Specific
Laws & Regulations
Resources for Making SUre Your business is ComplianT:
General Requirements for Running a Business
General Business License
Applicable Permits
Zoning Permit for Brick & Mortar Businesses
Pay applicable taxes. Learn more HERE.
Learn about the what, why, & HOW of deducting your business expenses HERE.
Business Personal Property Assessment
State Specific Legal Guides For New Businesses: Find them HERE.
Food and TANgible Goods/Products
Handmade, Home Goods, & Clothing Industries:
LEATHER GOODS. For leather goods, check out this summary of the key compliance concerns including labeling requirements HERE.
CANDLES. The current industry standards for candles have been developed and published through the ASTM International standards organization. Although ASTM candle standards are applicable to the US, they are often referenced internationally by candle organizations and regulatory authorities abroad. To read about key Industry Standards for the US Candle Industry click HERE.
Baby/Children Products Industry: COMING SOON.
Cosmetics Industry:
The cosmetics industry is often regulated by the same federal authority as food and drugs, in the United States, this is the U.S. Food an Drug Administration.
To read about Key Legal Concepts for the US Cosmetics Industry click HERE.
Restaurant / Food Industry: COMING SOON.
The food industry is often regulated by the same federal authority as food and cosmetics, in the United States, this is the U.S. Food an Drug Administration.
Permits required.
Email hello@startupheartup.com for more information!
Alcohol / Bar / Cannibis Industry: COMING SOON.
Permits required.
Email hello@startupheartup.com for more information!
Service Industries
Fitness / Nutrition: COMING SOON.
Childcare Industry: COMING SOON.
Transportation Industry: COMING SOON.
Questions?
Email hello!@startupheartup.com with your tax or other legal questions. I am constantly building out this page with resources to make the process simpler for small biz owners. Your questions are valid and valuable to the Start Up Heart Up community!
Check out our various blogs below for more on specific legal topics for small biz owners:
