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Legal-Ease: New business checklist – The Lima News

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In times of change, like we are experiencing now, entrepreneurs have a chance to thrive. Many new businesses are not successful (if perpetuity and incredible wealth are the standards for success). Some businesses, by their nature, will not last forever, and that does not define the business as being unsuccessful. Nevertheless, for the businesses that “make it,” disproportionately high rewards can await.

Many businesses start as hobbies or “side hustles.” Sometimes, the new “business” remains a gig that the business owner maintains independent from a more permanent, full-time job. Other times, the new business can grow to a point where the business owner may try to make the new business the owner’s new permanent, full-time job.

Regardless of where a new business may be in its beginning stages, there are several steps that every entrepreneur should undertake as that new business grows.

First, every business owner needs to have a deep relationship with the business’s insurance agent. Every activity that we undertake in this world can give rise to liability and present the possibility that someone will sue the business or the business owner. Obviously, not all lawsuits will succeed, but the best part of good insurance is that the insurance company will pay for the legal fees to defend the business or business owner.

Second, ensure that the business has its requisite government licenses and permits. Businesses can need vendors, food service, solicitation, dealership and various other professional and other licenses that are necessary for the business to do what it does. Suffice it to say that if a business is making even decent money, there is a good chance that the business’s area of service/product is overseen by a government authority that requires a license to at least identify those who are in that certain various field of service or production.

Attorneys can assist in identifying what licenses a business needs, but often, proper Google searches (relying on legitimate government websites) can provide some initial guidance to business owners concerning necessary licensing for a business to do what a business is doing or intends to do.

Third, discuss taxation with an accountant. Businesses can be subject to certain taxes not applicable to individuals. Vice versa, businesses can sometimes be uniquely qualified to utilize certain tax advantages. The accountant with whom the business works needs to be more than a tax return preparer. A proper business needs an accounting advisor who does tax planning and advising.

Fourth, get organized. Most entrepreneurs cannot afford a professional business manager, so the business owner himself or herself should find a way to manage the various aspects of the business in an organized fashion. Almost every business should purchase and use accounting software like QuickBooks or NetSuite. Free software provided with the purchase of a computer or tablet is insufficient for most businesses.

Finally, if the business has a possible risk that is incredibly large in magnitude (possibility of a potentially devastating crisis), the business owner should consider creating an entity like an LLC.

Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at Lee@LeeSchroeder.com or at 419-659-2058. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.



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