{"id":10802,"date":"2022-07-01T13:05:58","date_gmt":"2022-07-01T17:05:58","guid":{"rendered":"https:\/\/www.franchisegator.com\/articles\/?p=10802"},"modified":"2022-09-29T11:40:31","modified_gmt":"2022-09-29T15:40:31","slug":"legal-questions-when-starting-business","status":"publish","type":"post","link":"https:\/\/www.franchisegator.com\/articles\/legal-questions-when-starting-business\/","title":{"rendered":"Legal Questions to Ask When Starting a Business"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Are you thinking about <\/span><a href=\"https:\/\/www.franchisegator.com\/info\/starting-business\/\"><span style=\"font-weight: 400;\">starting a business<\/span><\/a><span style=\"font-weight: 400;\"> this year? Business ownership will provide you the financial freedom to be your own boss and contribute to your community. But what are the legal requirements for starting a business? You can use this guide as your <\/span><a href=\"https:\/\/www.franchisegator.com\/info\/new-business-legal-checklist\/\"><span style=\"font-weight: 400;\">new business legal checklist<\/span><\/a><span style=\"font-weight: 400;\"> and get started on your business today.<\/span><\/p>\n<p><b>What Business Structure Should I Choose?<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Your business structure determines just about everything about your business, from how you run your day-to-day operations to how you plan for taxes. There are four primary types of business structures:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Sole proprietorships<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Partnerships<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Limited liability companies (LLCs)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Corporations\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Each structure has its own strengths and weaknesses. Obviously, if you\u2019re starting a business with someone else, you\u2019ll need to form a partnership or LLC. However, an LLC can also offer liability protection if you\u2019re a solo entrepreneur.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This decision should be made carefully, and there are different requirements for each structure. In some cases, you may want to begin as a sole proprietorship, then change your structure once you\u2019re established.<\/span><\/p>\n<p><b>How Do I Register My Business Name?<\/b><\/p>\n<p><span style=\"font-weight: 400;\">A business registration connects back to your business structure, which is why it appears first on our new business legal checklist. If you\u2019re a sole proprietor, your business will automatically be registered as your personal, legal name.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Obviously, most business owners would prefer to go by their business name, especially since this will appear on their customers\u2019 credit card statements. To do this, you\u2019ll need to register with a \u201cDoing Business As\u201d (DBA) name and usually need to file paperwork with your local registrar\u2019s office.<\/span><\/p>\n<p><b>How Do I Protect My Intellectual Property?<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Your products, services, brand names, logos, and other business-related items are unique to your business. What steps are you taking to protect them?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A legal guide can help you walk through the trademark and patenting process and ensure that your intellectual property receives the legal protection it deserves.<\/span><\/p>\n<p><b>Do I Need Business Insurance?<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Business insurance protects your business (and its assets) against a variety of possible dangers. These include fire, natural disaster, theft, vandalism, and accidents.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Technically, not every business owner needs insurance. But if you hire employees of any kind, you\u2019re federally required to carry insurance. Additionally, some commercial realtors require you to carry business insurance before leasing commercial space.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Check with a legal expert on whether your business will require insurance. In most cases, it\u2019s better to have the insurance and not need it than to need it and not have it, as it can prevent you from being personally liable for accidents and other disasters.<\/span><\/p>\n<p><b>How Do I Pay Taxes?<\/b><\/p>\n<p><span style=\"font-weight: 400;\">When you work for another company, your taxes are largely taken care of for you. Your employer will even pay their portion of your Social Security and Medicare taxes, and you\u2019ll file a single tax return every year.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Starting a business by yourself changes everything. How taxes work depends on how your business is structured.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A sole proprietorship, for example, is known as a \u201cpass-through\u201d entity, which means that profit passes through your business directly to you. You\u2019ll be expected to pay tax on this revenue just as you would ordinary income. But there\u2019s a little more to it than that.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For starters, you\u2019ll be responsible for covering all of your Social Security and Medicare taxes. This amount is usually known as \u201cself-employment tax,\u201d which is calculated at a rate of 15.3%.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Additionally, small business owners should plan on making quarterly estimated tax payments to ensure that they stay up-to-date and that they\u2019re not surprised by their annual tax bill. The deadlines for these payments can change slightly from year to year, so it\u2019s important that entrepreneurs stay current with these financial obligations.<\/span><\/p>\n<p><b>What Contracts Does My Business Need?<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Depending on the nature of your business, you may need contracts to govern relationships with your suppliers or the contractors who assist in the setup of your business.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A legal professional can help you ensure that these contracts are legally binding and can even help you prepare routine agreements that you\u2019ll use with recurring orders from your vendors and suppliers.<\/span><\/p>\n<p><b>Franchise Opportunities in Your City<\/b><\/p>\n<p><span style=\"font-weight: 400;\">In addition to this new business legal checklist, Franchise Gator provides many other resources aimed at helping you <a href=\"https:\/\/www.franchisegator.com\/franchise-listings.php\">start a franchise<\/a>. Use our franchise locator tool to find an opportunity in your city and see how you can earn a living as the owner of a restaurant, retail store, or another type of franchise. We\u2019re here to help you out.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Are you thinking about starting a business this year? Business ownership will provide you the financial freedom to be your own boss and contribute to your community. But what are the legal requirements for starting a business? You can use this guide as your new business legal checklist and get started on your business today. <a href=\"https:\/\/www.franchisegator.com\/articles\/legal-questions-when-starting-business\/\" class=\"more-link\">&#8230;<span class=\"screen-reader-text\">  Legal Questions to Ask When Starting a Business<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":10803,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26,24],"tags":[],"class_list":["post-10802","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-for-starters","category-franchise-experts"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Legal Questions to Ask When Starting a Business - Franchising Blog<\/title>\n<meta name=\"description\" content=\"Interested in starting a business but don\u2019t know the legal requirements to start a business? 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