7 Legal Mistakes You Make When Starting Your Business As An LLC

Starting your business as an LLC can be very exciting as well as challenging. Your excitement could, however, cause you to make some costly mistakes. Here are seven mistakes that you should avoid making when building your startup.

1. Not Starting Your Business as An LLC To Save Costs

You will need to determine the structure of your business before you set it up. LLC is a good set up because it saves you cash in taxes. Unless you have a good reason for choosing other business structures, you should decide to set up an LLC because of the tax-saving benefit.

1. You Fail to Register A Name

Do not create a website, print business cards, and have a logo made before you do a name search if you are registering an LLC or a corporation. You cannot use a name that is already in use for the preceding two types of business. You could make a costly mistake if you give your LLC a name and proceed to create stuff before doing a name search.

1. Not Drafting A Nondisclosure Agreement and A Contract

When you are starting your business as an LLC, you talk to a lot of professionals about many things. Having a nondisclosure agreement helps keep these conversations private. You will also need to draft a contract to use with your customers. Even if you have few customers when you start, an agreement to use with them is very crucial.

1. Ignoring Securities Laws

You cannot just hand out stock in your company to investors, friends, or family without giving due regard to securities laws. You need to issue securities with the help of a business lawyer. It’s a delicate process that needs careful consideration of the securities rules. Disregarding securities laws can result in you incurring costly penalties.

1. Failing to Protect Your Intellectual Property

You will need to safeguard your company’s intellectual property by getting a trademark, patent, and intellectual protection. You protect patents and copyrights at the federal level.

1. Improperly Hiring Employees

When starting your business as an LLC, your main interest when hiring may be on getting the right employees. It is also equally important to follow the proper procedures when hiring. You must take time to create all the essential documents required by law when you begin to engage employees. Following adequate procedures will save you costs and time.

1. Not Retaining A Business Lawyer

When you are starting in your business, you will need to get a business lawyer. A business lawyer can answer your legal questions, review documents, and help ensure you comply with legal requirements. Not retaining a business lawyer can end up being rather costly if you make mistakes.

Are you in the process of starting your business as an LLC or any other? Call (305) 921-0440 or email us to [email protected] and get answers to your questions.