Starting a new business as an entrepreneur is an exciting time – mixed with nerve-wracking stress that will test your resolve. With so much happening, it can be easy to focus only on the day-to-day running of your organization. Still, there are numerous legal points that you need to understand to remain on the right side of the law as your start-up grows.
Adverse Action
When it comes to an adverse action meaning, we can broadly divide it into two; actions that occur while a person is employed and measures that may prevent future employment during the hiring process. This has been put into place to address discrimination or retaliation cases.
- Employed adverse action occurs when a decision is taken that will negatively affect an employee, for example, a dismissal, demotion, or pay drop.
- Pre-employment adverse action can happen before somebody is even offered a job. It usually occurs because a decision is taken based on a piece of information in their background check or because a hirer rejects a candidate for discriminatory reasons.
Setting Up
Here are the main legal points that you need to consider when setting up a business:
- You’ll need to set up a mailing address, even if you don’t have a physical location.
- Are you setting up a limited liability company (LLC) or corporation?
- Do you need to apply for a license for your start-up?
- It’s highly recommended that you put any agreements in writing.
Intellectual Property Law
In the early days of a fledgling business, it can be tempting to cut corner and save money wherever possible. However, infringing on somebody else’s intellectual property and getting caught can torpedo a small business before it even starts.
Intellectual property law mainly covers trademarks, patents, and copyrights, protecting those who created the product from financial loss should anybody steal it. This can include songs, images, logos, slogans, or inventions.
This is an area where you need to step carefully. For the most serious misdemeanors, you can face a maximum of one year and be fined up to $100,000.
Taxation
Nobody likes taxes, but you understand their complexity once you own a business. As an entrepreneur, whether with a single small company or several that have been in place for years, you must know what you’re doing regarding taxes.
Aim to get on top of this from the start. You want to avoid playing catch-up, trying to find invoices from two or three years ago. Pay special attention to your location, but potentially also to where you’re selling or doing business. The four main types of taxes that an entrepreneur might need to pay are:
- Sales tax
- State and federal taxes
- Income tax
- Employment tax
Conclusion
Maybe you wanted to create a life where you were in control of your success or build something you were proud of. Whatever led you to the exciting world of entrepreneurship, it’s essential to keep at least one foot firmly planted on the ground. Nobody likes the legal details, but they are an inevitable and vital part of any business. You’ve got this!