Business Owner Checklist

1.       Entity Selection/Formation: Choosing the right kind of business formation can be very important to long-term growth, liability and operating costs.  While most start-ups begin as a limited liability company (LLC), sometimes it may be better to begin as a traditional C-Corporation.  There are plenty of tax and liability questions involved in choosing your entity – make sure you are forming what serves you best.

2.      Employment/HR: If you plan to hire employees at any time, especially in the next 12 months, make sure you have a clear process in place that deals with hiring, firing, discipline, work place injury, employee complaints, employees with disabilities (including pregnancy), etc. One of the biggest liabilities facing a new business is the risk posed by disgruntled employees.

3.      Drafting Contracts: Every business either does or should have several contracts in place as it begins providing goods or services.  Employment contracts? Non-compete or non-disclosure agreements? Purchase orders? Retainer agreements? Leases? Buy/Sell contracts for a business or related real estate?  Businesses often get his hardest by “the fine print.” There are some good templates out there on google, but as laws change, some of those templates are not updated.  A quick check can often verify whether you are on the right track.  Attorneys don’t need to draft the entire contract, but a spot-check doesn’t hurt.

4.      Accountants: Any good business attorney should be able to recommend a few accountants to help you either teach you how to handle your books and payroll or else do it themselves, allowing you to focus on what you do best – building your business.  Don’t wait until the end of the year to get a $50,000 payment notice from the IRS to begin worrying about your business accounting.

5.      Agree to Disagree: This adage may be a practical solution to resolving disputes between people, but in business the adage falls flat.  The best time to agree is in the beginning.  Any time you have more than one person with any ownership interest in a business, you should put in place an Operating Agreement.  These agreements can be simple or complex, but they are essential to resolving future disagreements and protecting the future growth and ownership of the business. 

6.      Hiring Foreigners: It is a very complicated process to consider how and when to hire a foreign national.  Just because a person is here “legally” (i.e. as a student or as a visitor) does not automatically carry work authorization.  There are heavy penalties for companies who hire those not authorized to work, including both civil fines and criminal sentences.

7.      Agency and Authority: Who can represent you?  Can certain people sign on behalf of the company? Are there company vehicles or equipment that employees are required to use?  Make sure there are clear distinctions regarding who can legally “bind” the company.  Often, you can do this with a few provisions in the Operating Agreement and Certificate of Organization or Articles of Incorporation.

8.      Intellectual Property: So you have a cool idea, right? Well, have you taken any steps to protect that idea?  Can you get a trademark for, patent or copyright it?  Have you set up a multi-layered corporate entity structure to further insulate your intellectual property assets from third party claims or lawsuits?

9.      Second Pair of Eyes: Do you have a trusted friend of colleague with whom you can share ideas and bounce ideas?  If not, find one.  These sounding boards can often save you from mistakes that are made by those “too close to the situation.”

Here to help answer your business/legal questions.  Quick consults are free.