Starting a business is both the most exciting and most stressful thing some people will ever go through. There are a lot of details to consider, and the rules may be slightly different depending on what state you’re in, but it is not impossible. You will, however, need to stay organized and plan accordingly to make sure that you address the legal requirements to get your business off on the right foot.

How Do I Get My Business Started?

Step 1: Choose your Business Structure

One of the most important decisions you will make for your business is regarding the structure it will take. The organizational structure you choose will have an impact on your legal and financial status. Specifically, different types of business entities have different tax requirements and affect your personal liability differently.

Sole Proprietorship

If you are the only member of your business, you are likely to be a sole proprietorship unless you elect to file as a different type of company. In a sole proprietorship, you have all the responsibility, but you also get all the profits of the business. Because there is no legal distinction between the business and the individual, you are accountable for all debts of the business.


Partnerships are created when two or more people create a business together. Each partner contributes money, property, labor, or skills to create the business. They also share the business profits and losses. Partnership agreements dictate how much of a percentage of the business each partner owns, and how much of the profits each partner is entitled to.

If there is no partnership agreement, each partner will own equal shares of the business profits and losses. If a lawsuit is filed against the partnership, all partners are responsible for the partnership’s responsibilities and obligations.

A partnership does not pay taxes on the business’s income. Instead, each partner pays taxes on their share of the business income, as well as self-employment taxes.

Limited Liability Partnership (LLP)

An LLP is like a partnership, but is set up to allow each of the individual partners to be free from the debts and liabilities of all the other partners, as well as certain debts of the partnership. This gives a layer of protection to the partners—if a lawsuit is filed against the LLP, no one partner is personally responsible. However, each partner is responsible for their own negligent behavior.

Limited Liability Company (LLC)

LLCs are a popular choice for new business owners. This business structure provides the limited liability benefits of a corporation while still having the flexibility and tax benefits of a partnership. Members of the LLC cannot be held personally liable for the debts and actions of the business, protecting the members’ personal assets from any creditors even if they are actively engaged in the everyday management of the business.


Corporations are business entities with authority to act as an individual person, independent from the shareholders who own it. There are many different types of corporations out there, but they tend to follow the same basic format. The different types of corporations are usually classified regarding the purpose of the business, the manner in which it is taxed, the number of shareholders the company will have, and whether the corporation incorporated to make a profit.

Step 2: Pick a Business Name

Once you know what type of business structure you want to use, you need to give your business a name. This is important for building a brand, but there are also some rules. For example, if your business is an LLC, your state may have a rule that the phrase “LLC” or “Limited Liability Company” will need to be in the name of your business.

You will also need to make sure that your business name is unique and different, to avoid confusion with other existing businesses. You will find it helpful to search for your proposed business name in your state records—in many states, these records are kept by the Secretary of State’s office.

If your business name is available in the records, you may be able to reserve it for a brief period of time while you get your filing documents together. If someone else already has the name you have in mind, you’ll need to keep thinking and searching to come up with a unique business name to register with the state.

Step 3: File Organizational Documents

When you start a business, you will need to fill out and file certain paperwork with the government. The documents you file will depend on the type of business that you are creating and the state in which it is formed. Most of the paperwork will establish the name of the business, the principal members or owners, and contact information for the business.

If you are creating an LLC, you will need to file Articles of Organization with your Secretary of State’s office. A corporation requires a corporate charter and articles of incorporation. Operating agreements outline the internal rules by which the business with operate, specifically relating to financial and functional decisions.

Step 4: File For Your Employer Identification Number (EIN)

An important point to remember when starting your own business, especially if you anticipate having employees, is to file for your Employer Identification Number (EIN). You will need an EIN in order to open your business bank account and to file your business tax returns. This is easily done by contacting the IRS either by phone or by applying online at the IRS website.

Step 5: Create a Business Plan

In order to set yourself up for success, you’ll want to have a reasonable business plan that takes into consideration issues like financing and budgeting, raising capital (loans and investors), the possibility of future growth, and conflict resolution.

Step 6: Take Steps to Protect Your Intellectual Property

Be sure to file for any trademarks, copyrights, or patents for ideas and products that you develop in order to protect the business’s intellectual property.

What are Some Legal Issues Associated with New Businesses?

Starting a new company can sometimes be complicated, and there may be a variety of legal issues you may run into in getting things off the ground. It helps to know what kind of issues may arise, so that you can be prepared for them. Some common legal issues that are associated with starting up a business include

  • Breach of Contract: when getting started, there are often negotiations and contracts involved. Sometimes parties cannot always meet their contractual obligations.
  • Licenses: Depending on what industry your business is in, you may need various licenses or permits. At the very least, you will likely need a business license.
  • Non-Disclosure Agreements: Consider confidentiality and non-disclosure agreements when you negotiate financing or enter into contracts with suppliers.
  • Zoning: when selecting the location for your business, make sure that the location is properly zoned for the industry or type of business you plan to work in.
  • Taxes and Bookkeeping: This may seem fairly simple, but it is very important to have organized bookkeeping methods. This will come in handy when it comes time to file income taxes for the business.
  • Business Succession: even if you’re just getting started, it helps to plan for worst-case scenarios. Corporate succession laws regulate issues regarding company termination and transferring a company to a new owner.

You may also run into issues regarding hiring or staffing issues and the start-up loans, financing, and capital that may be needed to help get your business up and running.

Can a Lawyer Help Me Get My Business Started?

If you would like to start your own business, you may want to contact an experienced business lawyer. Depending on the state you live in, there are many details to consider in starting a business, and there are many different legal issues that you may run into.

Talking to a business law attorney can help clear up any questions you may have about the process to get your business set up correctly. Additionally, if you do have a legal dispute come up in the course of starting your business, an attorney can undertake negotiations on your behalf and represent your interests and the interests of your company in litigation, if it comes to that.