Starting up a new business can be exciting, and also challenging. Oftentimes, new startups will need to be educated on the complexities of forming a business in a way that legally protects their assets, and allows them to operate under more favorable tax laws – areas in which people often get help from a business lawyer like Lloyd & Mousilli in Houston.
Formation of a business is a process that is typically started by an individual or a group of people with a common purpose. The process of formation of a business involves three key elements: formation of business idea, drafting and filing the business formation document and finally, obtaining necessary business licenses and permits to operate the business.
Here’s the business formation process in more detail:
1 – Choosing a Business Name
A name is important. It must be unique, distinct and memorable. Ideally, it should be inspired by your product or service in a way that reflects its characteristics. A good business name can help you identify with your target audience, and when enough people know your brand, the name will make your customers feel a certain ‘experience’ when they think about it – one that makes them wanting to keep coming back.
2 – Choosing a Type of Business Entity
When you’re ready to start a new business, you will have to create a corporate entity to operate the business. This legally establishes the business as a separate ‘person’ from yourself in the eyes of the law, protecting you from personal liability.
There are several ways to do this, including creating a sole proprietorship, partnership, limited liability company (LLC), or corporation. These different business structures come with unique benefits and responsibilities, so it’s important to know which is right for you.
To further complicate matters, business entities are formed and incorporated under the laws of a state, so each of the 50 states will have its own laws governing how business entities are formed, managed and tax. Some less entrepreneur-friendly, some more so than others.
Some entrepreneurs even choose to have their business entity formed out of state, due to favorable tax laws; for example, many major corporations, including Silicon Valley conglomerates, have incorporated under the laws of Delaware.
3 – Choosing a Registered Agent
One of the most important considerations for any business is choosing a registered agent. If you can’t navigate the complex legalese of forming a business entity, the registered agent can file the necessary paperwork to get your entity registered on your behalf.
A registered agent can be either a company or an individual.
4 – Negotiating a Lease
Establishing a physical presence is key, even if you’re working from home. When you plan to operate out of a physical office, one of the most common steps is to negotiate your lease.
Negotiating a lease can be intimidating, but it shouldn’t be. Negotiation is just a conversation that you should try to have as early in the process as possible so that both parties can get what they want out of the deal.
5 – Registering a Domain
Whether you plan on having a big online presence or not, you’ve got to have some kind of an online equivalent to your physical storefront. Either that, or you’re online only.
With a registrar such as Namecheap, you can secure a website domain for your brand, or for the product or service you’re selling. The domain name you register may also have a substantial impact on your web presence; for further advice on that, you want to consult someone who is a professional at SEO (search engine optimization).
6 – Registering a Trademark
Look into registering your business name, slogan and logo with the USPTO. This will give you legal protection from copycats, and anyone who infringes on the status of your brand.
It’s a good idea to register trademarks as soon as possible so no one can copy your ideas or take advantage of the popularity associated with your brand.
To get help with laying a strong foundation for your business, contact LloydMousilli.com. They can be your partner in every stage of business, from startup to exit.