small business articles business management businesses Marketing sales Technology Business finance Lean Manufacturing small business Investing articles employee health

Legal steps for starting a small business


Starting a business is an exciting time. Small businesses give workers the freedom to control their own company while being able to keep their own profits.

Before you start your small business, however, it's important to know all of the legal requirements. Starting a business involves a different set of tax, property, licensing, and insurance laws that you may or may not be aware of.

The following are a few of the legal requirements you will want to get in order before starting your small or home business:

Choose your type of business

The legal requirements for your business will vary depending on what type of business you have. Basically, they can be a sole proprietorship, an LLC (limited liability corporation), or a corporation. Once you know this, you can follow the specific laws required for your type of business.

Check with your state and each state you do business in.

Each state has differing laws when it comes to legal requirements for small businesses. Each state has a Small Business Administration resource office that will provide you with all of the legal requirements for starting a business. Keep in mind that legally running your business includes not only complying with federal and local laws in the state in which you run your business, but you also must meet laws for every state you do business in. This also includes internet transactions if you mail your product to another state.

Get all necessary licensing
Different businesses require different types of licenses. For example, a restaurant or food cart will require a food handler's permit, health department licensing, and liquor licenses if alcohol is being served. Be aware of licensing for your employees as well; hair stylists or others in the beauty industry must meet certain licenses for their profession, as well as daycare workers.

Get insured
Insurance is a vital part of a business to protect yourself and your assets and employees. The following insurance types are required by law for the majority of business owners:

  • Liability. This is to protect you in the event of a lawsuit.

  • - Property. Property insurance will protect your building, inventory, and other equipment in the event it is damaged or destroyed.

  • - Auto. Automobile insurance is required if you use company vehicles.

  • - Home Office. If your business is run out of your home, you will need to update your existing homeowner's insurance policy to include your office equipment and anything else related to your business.

Trademarks and copyrights
If you have a business name and logo you want to trademark and copyright so that no one else can use or copy it, you will also need to look into patent, copyright, and trademark laws to find out what steps are required to obtain a trademark and copyright.

Know labor laws
If you have employees, you will have to comply with labor and minimum wage laws within the country and state. Not only that, but you will also need an Employer Identification Number from the IRS, regardless of whether you have employees or not.

There are many legal requirements for starting a small business, and it's important to comply with each of them. You may also want to consider obtaining an attorney for legal advice. It's also a good idea to contact the Small Business Administration in your area

FREE: Get More Leads!
How To Get More LeadsSubscribe to our free newsletter and get our "How To Get More Leads" course free via email. Just enter your first name and email address below to subscribe.
First Name *
Email *

Get More Business Info
Sponsored Links
Recent Articles


Copyright 2003-2020 by - All Rights Reserved
Privacy Policy, Terms of Use