1. Choose the best structure for your business.
A business can be organized in several ways—as a sole proprietorship, partnership, LLC, or corporation. Each structure involves different tax implications and levels of exposure to personal liability, and imposes different obligations. Which structure best suits your business depends on multiple factors:
- The laws in your state
- may make one form more advantageous than another, due to tax incentives.
- could make the startup costs of one structure appealing or very costly.
- might impose heavy record keeping obligations for a particular structure.
- Are you going into business with at least one partner?
- Is it important to you, considering the type of business you are creating, to be shielded from personal liability?
These are just some factors to consider when making the important decision of how to structure your business. Our business law attorneys in Myrtle Beach, SC can counsel you on forming your business in South Carolina.
2. Apply for applicable licenses and permits.
Few industries are free from government regulation. Whether you are opening a professional practice, producing baked goods, opening a restaurant, starting a beauty salon or even a pet grooming business, you will likely need to apply for applicable licenses or permits.
Even if your business is not subject to specific licensing and permitting requirements, you will still need to ensure that zoning laws allow you to conduct that type of business at your office location.
If you’re starting a business in South Carolina, check out our Business Formation Form.
3. Draft comprehensive partnership and independent contractor agreements.
If you are structuring your business as a partnership, the partnership agreement should clearly set out the internal workings of the partnership, including agreements about the capital contributions of each partner and debts of the partnership. You may also enter into partnership agreements with other companies that your business will work closely with or collaborate with. It is important to draft an agreement between your business and the other entity to clearly delineate expectations, obligations, terms, and allocation of liability, when applicable.
Written agreements with independent contractors are important for the same reasons, but also to clearly define the legal relationship between your business and the independent contractor and their status as an independent contractor, rather than an employee. This distinction is crucial, as your business could be exposed to secondary (vicarious) liability for any actionable negligence of an independent contractor if they were instead determined to be an employee or agent of your business.
4. Protect your intellectual property (and ensure you are not infringing upon the existing rights of others).
Regardless of the type of business you are engaged in, you likely have some form of intellectual property to protect, whether it be a trademark name, logo or patentable product/technology. Writing, music, and even software may be protected under copyright law. Each form of intellectual property protection—trademark, copyright, or patent—is subject to different requirements.
It is prudent to conduct a comprehensive trademark search before even choosing a business name or logo to avoid the risk of infringing on a previously registered mark.
Keep in mind that trademarks and patents registered in the U.S. are not protected globally. If you plan to do business in another country, consult an attorney to discuss the best way to manage your IP portfolio globally.
5. Maintain proper accounting methods.
You might consider hiring an accountant to keep the books of the business or do so yourself. Whatever you choose, be careful to keep all personal and business expenses completely separate, and maintain precise records. Commingling personal and business expenses could create tax and legal implications.
Starting a new business is an exciting endeavor. Begin on the right foot by taking the necessary steps to protect yourself when starting a business. Consulting a knowledgable business lawyer in Myrtle Beach, like Grand Strand Law Group is a great first step to ensuring all your bases are covered.