What Every Start-Up Should Know About Business Law

Anita Ginsburg

February 17, 2015

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Business law applies to established businesses and new start-ups alike. Launching a new business involves a lot of planning, and being familiar with the laws that apply to start-ups can help a business owner avoid certain pitfalls. This prevents having to deal with related legal and financial problems later on. Here are a few things every start-up should know about basic business law.

Choosing a business structure

When first starting a business, the business structure chosen will determine the way lots of other things need to be handled. Making this decision requires careful thought. It determines who owns the business, what type of income tax needs to be filed, and who is responsible for any legal claims that get filed against the business.

Taxes

Business owners are required to file taxes quarterly, so they pay taxes every three months as opposed to annually. Not doing so can result in a penalty, and many new businesses owners struggle to stay on top of this.

Keeping records

Business record keeping needs to account for two basic things: expenses and income. Supporting documents also need to be kept. This includes things like invoices, receipts, deposit slips and canceled checks. Keeping careful records and having this information organized well will be of tremendous value to a business. It will be especially useful in the event that your business is ever audited.

Insurance

The Affordable Health Care Act requires all U.S. citizens to get health insurance. Those who don't may face a penalty at tax time. People who are self-employed may be able to write off health insurance premiums as a business expense, so be sure to keep all receipts related to premium payments.

Trademarks

Business owners file for trademarks to protect their brands. Before setting up a business, it is important to make sure that the business name is not infringing upon another's trademark. A search of the U.S. Patent Office website can help confirm that a name is available for use.

Copyrights

Copyrights are another issue to be mindful of. Most creative works are copyrighted, and copyright violations can result in legal issues, so get permission before using other people's work in marketing materials and other promotions.

Starting a new business often means dealing with many different and new things at once. Many start-ups hire lawyers to help them navigate their way through the details of complex business law, but these basics cover some of the essentials new business owners need to be aware of.

Informational credit to Carter West.