Business and Commercial Law Facts: Four Things to Consider Before Starting a Small Business

Know your local business laws

Tax laws differ depending on the type of business you own and on whether or not you have employees. You may need to comply with special licensing or sales tax requirements. Failure to follow applicable Redlands, California local and state laws, and failure to comply with federal laws regarding small businesses can result in serious penalties and costs to your business. It is always a good idea to consult with a qualified business lawyer or commercial law expert in Redlands, California before you get your business up and running. Here are four things to consider before you start your small business.

1. Select an appropriate business structure. There are many business structures you can choose from in California. According to the California Secretary of State, you can have a corporation, a limited liability company, a limited partnership, a general partnership, a limited liability partnership, or a sole proprietorship. The choice you make can have immense legal and tax implications, so the California Secretary of State encourages business to seek the counsel of a business lawyer or commercial lawyer before deciding on a structure.
2. Get an Employer Identification Number. Most businesses—but not all—will need an employer identification number. If you have employees, have organized your business as a corporation or proprietorship, file taxes on employment, excise, alcohol, tobacco, or firearms, have a Keogh plan, or are involved with certain organizations, you will require an EIN. The IRS provides more information about who requires an EIN. If you’re still not sure about whether you qualify for exemption from this requirement, it may be wise to speak to a commercial lawyer.
3. Make sure you meet all licensing requirements. According to the California Secretary of State, many businesses require licenses or permits before they can begin operations. For instance, if you are providing professional medical services, a medical license may be required. Or, if you are selling meat, alcohol, or tobacco, you may require licenses from appropriate regulatory bodies.
4. Consider labor laws. If you plan to hire employees, you’ll need to make sure that you are in compliance with labor and employment laws. Failure to follow these laws can have immense consequences. As an employer, it is your responsibility to understand employee rights and protections. You’ll also need to make sure that you comply with tax requirements for hiring employees.

Don't just jump into the water

There are many things to consider before you start a business. The consequences of not meeting the legal and tax requirements can be very costly down the line. You want to make sure that you give yourself the best opportunity to succeed. Before you start your business, it is wise to speak to a commercial lawyer who is qualified to offer assistance. Many law firms such as Eric D. Anderson Law, Ltd., focus specifically on business law and can make sure that you are complying with all applicable laws and that you are protecting your interests. Getting qualified counsel now can save you money further down the line.