Every business needs legal support, but many business owners do not prioritize it. As a business entity operating out of Illinois, you need a seasoned attorney to help with different aspects of the law related to your operations. It helps minimize risk and prevent mistakes that may lead to legal disputes and are potentially devastating to the business and its owner.
This article points out the most common mistakes to watch out for and avoid.
Failing to start the business as a corporation or LLC
The legal form that your business takes is a vital determinant of its success and future. Sole proprietorships are great, as they require no serious documentation except for permits. However, it would be best to consider the effects of choosing to operate a sole proprietorship on capital and legal separation. Of all forms of business that a business owner can take, sole proprietorships and partnerships are the most costly to form and operate due to legal and tax issues. If you decide to convert to an LLC, the associated costs are also substantial, and the process is quite lengthy.
Inadequate consideration of business name and trademark
Irrespective of your business form, you should carefully consider your choice of names for your company. This also applies to the domain name and brand materials such as logos, trademarks, and patents. If you do not trademark your brand, someone may steal it from you or claim that you did. Be sure of the name, its spellings, and connotations. Research your chosen name and trademark on Google and the US Patent and Trademark Center. An intellectual property lawyer is best suited to carry out professional trademark research.
Issues with Employee Agreements
Employee agreements are delicate things. They require thoughtful consideration to prevent legal disputes. Failing to draft a proper employment agreement creates an unfavorable situation for you as the employer. These agreements will reflect your company policy, employee categories, conditions of employment, benefits, and termination. You will need to talk to an attorney about drafting contracts based on worker classifications and the impact on liability. Vendors are to be separated from independent contractors and from actual employees.
Insufficient knowledge of Tax Considerations
Being unaware of tax laws makes you a liable victim of penalties that may be heavier than you can bear. You must put careful thought into knowing these structures, or having your attorney help you understand and map out strategies for the best outcomes. Tax incentives, savings, and reliefs may be available to you without your knowledge. The classification of taxes for your business may extend beyond just sales and payroll taxes. Your safest bet is with a seasoned attorney to help you cross every hurdle as they come.
Your relationship with your company’s attorney goes a long way in determining the safety of your business as a legal entity. Having sound legal counsel by your side will prevent potentially disastrous events.
At the offices of Hecht and Schondorf, we specialize in providing comprehensive legal support for our clients so that they can focus on their business goals with someone to defend their interests. Get started today.