How to handle the legal side of your small business venture

Image by Gerd Altmann from Pixabay

By Anita Ginsburg

Some people assume they can start a small business with nothing more than an ecommerce website and a social media announcement. However, in addition to actually creating your business, you need to consider the legal ramifications of your new business journey. Doing so from the beginning helps you to avoid legal trouble down the road. Here are some tips on how to handle the legal side of your new small business venture.

Establish yourself as a legal business

You need to register your business with the government. The first step in that is figuring out what type of business structure you want to file as. You will have the choice to register your company as an LLC, corporation, sole proprietorship, or partnership depending on the size of your business and on your business plan. Most new small businesses register as an LLC.

Once you establish your organization as a business, you have another step to do, this one in regards to taxes. The government will want to know what you make and how that money is used in order to tax you accordingly, so you need to get a corporate tax ID. Don’t forget that getting both a federal and state tax ID is necessary.

Obtain permits and licenses

Depending on your business and location, you may need to obtain certain permits or licenses, especially when working in anything having to do with health, controlled substances, construction, living creatures, or food. You may need permits when offering seemingly innocuous services, such as accounting or hair cutting. Check what permits you may need for your business at the federal, state, and local levels.

Buy commercial insurance

Most small businesses require a minimum of general liability insurance to protect you from financial repercussions that come from medical or property damage that may happen. This insurance protects your personal assets if you get sued. You can also opt for additional product liability insurance and commercial property insurance for full coverage. If you have employees, you will also need workers’ compensation insurance. There are many different kinds of business insurance. An insurance adjuster can tell you the requirements and their opinion on the level of coverage you need.

Hire a lawyer

A commercial law professional can walk you through the legalities your business will encounter in detail and explain the more complicated or unclear areas. They can even fill out some of the paperwork for you to ensure it gets filed properly and on time.

You will likely need to keep the lawyer on retainer as your company grows to provide legal counsel in case the need unexpectedly pops up, which it likely will at some point. As you grow, your lawyer can inform you about any new requirements that come up in your area or industry, such as additional required insurance or certifications. Working with the same firm of commercial solicitors over time will mean that your legal counsel always has a familiarity with your business and needs and can give you peace of mind.

When you complete the paperwork for any legal issues properly, you will know that you are protected no matter what comes your way. This will allow you to focus on your product, sales, and growing your business.


Anita Ginsburg is a freelance writer from Denver, CO. She studied at Colorado State University and now enjoys writing about health, business, and family. A mother of two wonderful children, she loves traveling with her family whenever she isn’t writing. You can find her on Twitter @anitaginsburg.

Leave a Reply

The Self-Employment Survival Guide can help you succeed. Learn all about it here.

Self-Employment Survival Guide book cover