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Planning to start a business in 2019? Here’s the good news: preparing now will help to put you and your new company on the right track to success. Great idea? Check. Detailed business plan that objectively measures where you’ll take the company in the short and long-term? Check. Plans to incorporate the business to legitimize your company? Another check! These are all standard to-dos for any entrepreneur starting up a business. Where else should you focus your attention? Before launching your business, don’t forget to take care of the following legal areas.
Conduct a name search and register your trademark
Does your business have an original name, logo or phrase? Do you plan to use it to identify your brand? If your answer is yes, it’s time to do a little homework. Never assume that your ideas were the first ever created in business. Conduct a name search before you apply to register your trademark.
There are a few ways you can conduct the search. The United States Patent and Trademark Office (USPTO) provides the ability to search through a trademark database. The system allows entrepreneurs to see if trademarks have already been registered or applied for that are similar to your mark, live or in use. Several Secretary of State websites also offer the ability to conduct business name searches. Check with the state you plan to do business in and see if your name is available.
Conducting a search now will allow you to quickly reserve and register the mark. This ensures you don’t accidentally infringe on an existing mark and ensures that your ideas are protected from the beginning.
I incorporated this year — do I need to do anything else?
Maybe you decided not to wait until 2019 to incorporate your business. Instead, you incorporated this year. Now, you have a head start before fully launching your company next year. Do you need to do anything else before the year ends?
Take this time to update your existing documents. If you have already incorporated as an LLC or corporation, file your annual report with the state. Remember that some entity types are excused from filing with the state. Check in with your Secretary of State to see what your entity’s requirements are and the deadlines for annual reports.
You may also hold an annual meeting and take minutes to update your documents. Minutes detail the account of decisions made during the meeting. They cover information ranging from the meeting’s date, time, place, individuals in attendance and agenda items. Many businesses may document few, if any, changes made during the year. However, it is still good to make sure your business is documenting any changes or meetings where matters of importance were discussed.
Seek out the support of a CPA and/or legal advisor
No two states are alike when it comes to starting a business. Some of the basic groundwork might be the same, such as the ability to incorporate as entities like limited liability companies (LLCs) and sole proprietorships or choosing registered agents.
However, every state comes with its own rules and regulations for the entity types that incorporate therein. A business entity filing with the California Secretary of State, for example, is not allowed to use a digital signature. Meanwhile, an LLC filing with the Delaware Secretary of State does not need to file an annual report, but is required to pay an annual tax of $300 dollars. The rules for other entities, like corporations, differ in the state.
Do you feel concerned that you may not have a thorough understanding of your state’s rules or fees? We recommend reaching out to a trusted CPA and/or legal advisor for advice. Both may provide more information about the filing process for your particular state. They can also work alongside you to best recommend the next steps for your business. If you are unsure of what type of entity to incorporate as, how often you’ll need to file taxes (or questions that pertain to the tax law), or have other questions in regards to staying in compliance, they can provide you with extra guidance.