Running a business is everybody’s dream, but not everyone manages to start a business. Getting started is always the hardest part. Dorothy Lawrence, the CEO of Dorothy Butler Law Firm, believes that a successful business needs to take the legal considerations of business into account right from the start. Dorothy is a well-known tax lawyer, bankruptcy lawyer, and entrepreneur. Here are some of the most important legal considerations Dorothy believes every business, especially startups, should take into account:
Decide your Business Structure Carefully
It is very important to choose the right business structure because it will most likely stay with you for the rest of your life. If you start your business with the wrong structure, there is no way in which it can succeed. That’s why Dorothyrecommends that anyone who wants to start a business must spend considerable time contemplating the different options available. As a businessperson, she says, you must be aware of the pros and cons of all business structures and decide which one best suits your needs and purposes. Dorothy recommends keeping the following salient points in mind while deciding on a business structure:
- Nature of business
- Ownership dynamics
- Number of founders and co-founders
- Model for raising money
- Investment needs
- Government regulations and controls
While startups can operate in many ways, Dorothy recommends the LLC structure for startups. That’s because it is a safe option for startups. In LLCs, losses and profits are reported separately and reported on the individual tax return. So, with an LLC startup, you can avoid double taxation. The great thing about LLCs is that you can have an unlimited number of shareholders.
Get a Business License
You will most likely need a license for your business. Dorothy recommends getting a relevant license as soon as possible. If you want to start your business in Texas, where Dorothy runs her firm, you will not need a general business license. However, certain businesses are required to have licenses in Texas. For example, if your business is about selling alcohol, you should get a Texas Alcoholic Beverage Commission. If you need any more information, check out the Texas Business Licenses & Permits Handbook.
Protect Yourself from Compensation Claims
As a business, you should be aware that you may face compensation claims from time to time. There are many ways in which you can save yourself from compensation claims. Dorothy recommends the following ways in which you can save yourself from compensation claims:
- Get a general liability insurance
- Keep your workplace healthy and safe
- Give your employees medical emergency and first aid treatment
- Handle the situation professionally because your reputation is on the line
It is highly important to be aware of tax implications as a business owner. As a tax lawyer, Dorothy Lawrencerecommends all business owners be fully aware of and understand the following:
- The basics of taxes, especially business-related taxes.
- Be aware of the different business-related types of taxes, such as GST, sales tax, payroll taxes, etc.
- Be aware of what you can and can’t deduct.
- Understand the tax implications of loans, shares, and insurance.
Get the Right Insurance
Businesses can be unpredictable, so you need to have the right insurance if you want to secure your future. There are many insurances you can pick from; Dorothy recommends the following for small businesses:
- General liability insurance
- Professional liability insurance
- Property insurance
- Workers’ compensation insurance.
- Business interruption insurance
- Employment Practices Liability Insurance