Thinking About Starting A Business?

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As you enter the idea stage of starting a business, here are some legal issues you should be aware of.

Are you thinking about starting a business? If so, it is important to be aware that there are many legal issues to consider that will affect your business. Here are some of the major idea milestones and the legal issues that might arise.

Here are a list of things to consider during the ideation stage of building your business.

• What type of goods or services does will your business provide?

This question also raises other questions about whether your need any licenses, regulatory compliance, or other qualifications in order to operate. For instance, if you’re planning to sell food, you will need to determine if you qualify as a “cottage food” business. This will effect the kinds of licenses, certifications, and permits you need and whether you must cook out of a commercial kitchen). Next, you should figure out what your food labeling requirements are, and then determine what kinds of licenses or permits you will need.

• What will you name your business?

Thinking about what to name your business can be overwhelming. There are so many things to consider. You want to make sure your brand will be memorable enough to stick for years to come.

Once you have a name in mind, you have to confirm that it’s available for use?

You should check if your business name is available for use in the state(s) in which you intend to operate.

If your name is unique enough, you may want to file for a trademark. This is especially important if you intent to operate or sell products nationwide.

• What type of business entity should you form?

This issue warrants its own blog post. Luckily, we already wrote an article on this subject. Check out The ABCs of INCs!

• What will you use as your marketing tagline?

Marketing taglines can help distinguish you from the competition. They are best kept short. Ideally, they should be catchy. Then you want to make sure you can use it without encountering legal issues? Besides Google, a US Patent and Trademark Office Search should also be done.

Not all brands have a logo. This entirely a matter of preference. What is great about a logo as it provides visual recognition for your business. Considering and designing a logo can be just a difficult as deciding on your business name. You will want your logo to register the same feeling as your business name.

If you are working with someone else on the design of a logo, you must have an agreement that assigns any and all interest in the logo to you or your business. Without an assignment, a freelancer or employee that is involved in the design of the logo may have an ownership interest in it.

You should also perform a US Patent and Trademark Office Search to make sure it is not infringing on any existing logos? The severity of any logo copyright infringement case is often dependent on many things, including the nature of the copyrighted work, and the amount of copyrighted information used in the new design. For instance, if your new logo used a similar color to another company, but the rest of the components of that logo were different, you may not be hit with a logo copyright notice. The unfortunate truth, however, is that it is difficult to know for certain whether you’re going to be held accountable for a copyright infringement issue or not. The best thing you can do to protect yourself is make sure that you do your research.

 

• Will you be virtual, or will you require a physical space?

There are big differences in terms of costs, liabilities, insurance, and regulations between having a home-based business versus a commercial space. Whether your based at home or in another space, you need to check with your local ordinances to make sure you can operate your type of business out of your home or commercial space. Then you need to check on whether any inspections, certifications, or permits are required. Also, regardless of where you are based, you need to consider what kinds of insurance you’ll need.

If you are going to lease a commercial space, there are a lot of additional considerations. One of the first and most important considerations is the actual lease agreement. As a new business, you will almost definitely have to personally guarantee the business’ obligations under the lease. Then you must figure out what kinds of inspections, certifications, and/or permits are required. Also, will you be responsible for building out the space for use? If you are buying or leasing equipment or other materials for use in your operations, you will also be entering into agreements that could have major consequences if you fall behind.

 

As you can there are so many things to consider as you ideate on your new business. In summary....

1. Decide on type of goods or services your business will provide

2. Determine the name of your business under which you can legally operate.

3. Determine the type of business entity you will form as this can certainly have short- and long-term consequences.

4. If you are planning on use a logo and/or marketing tagline, make sure to do your research!

5. Decide if your business will operate virtually or in a physical space as that will have implications on your insurance.

Last not but least, always consult with a business attorney who can help you start your business off on the right foot. 

Disclaimer:

Information contained in this post is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the with Michael H. Ansell, Esq., or other competent legal counsel.

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Picture of Michael Ansell, Esq.

Michael Ansell, Esq.

Michael Ansell is the founder and managing member of NextGen Counsel LLC. Throughout his years in practice, Michael focused on a variety of areas that impact small businesses, including contracts, employment, commercial leasing, corporate governance, construction, and general litigation.

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