You finally did it. You said good-bye to your dull, nine-to-five job, and you’ve decided to branch out on your own. You’re starting up your own company, and you’ll be doing something you love. It’s an exciting time, and you can’t wait to get started.
While your entrepreneurial spirit is telling you to dive in head first–and throw caution to the wind–there are some key foundational elements you want to be sure to put in place before you’re up and running. Getting your ducks in a row from the start is a worthwhile step, because it can help you avoid unnecessary litigation down the road.
Making it official
First things first, you need to register your company. But register as what? An S corp? A C corp? An LLC? You might be tempted to select LLC simply because it’s familiar, but this may not be the best choice for your company. Your tax situation, your familial status and a variety of other factors have an impact on which business structure is right for you. It’s worth discussing your options with a business lawyer.
If your business provides goods and services, then you need to create a legal document that defines what you offer and what your clients pay. This agreement should also include a clear return policy. Additionally, if you work in a high-risk business, it’s important to have your lawyer draft a disclaimer which states upfront what you aren’t responsible for.
If your business is more than a one-person operation, then you’ll probably end up having to share sensitive information with other employees, contractors or vendors at some point. Work with a lawyer to draft a comprehensive non-disclosure agreement, and be sure to have anyone you work with sign it at the start of the business relationship.
As an entrepreneur, you’re not expected to know all of preventative legal measures that can help make your business stronger. Having a general counsel can be extremely valuable to help you adjust to changing legal circumstances as your business grows.