First, decide of the legal form of business
organization you want to use.
For most businesses, this will be a sole
, or partnership
There are also other less used forms such as S corporations
, and limited partnerships
To insure that you are operating a legal business, check
with your local and state authorities to notify them of the nature of your
business and learn if there are any permits needed. Most small
businesses do not need a special permit, but some do. Your local city or county zoning
board can help steer you in the right direction.
For tax laws, contact an office of the Internal Revenue
Service for booklets and guides. The IRS will give you a free "New
Business Kit". Their Publication 334 also has
a lot of useful information about small business tax matters.
Some businesses require special authorization
from state agencies before they can conduct business. Certain health
facilities, transportation businesses, businesses dealing in dangerous chemicals, food
processors, and others must check with the appropriate state agency for permission to do
If you will be employing others in your business, the state
Employment Commission can advise you of laws pertaining to the
hiring, employment and pay of workers. There are also Federal laws in this area, but the
state agency can advise you of these also.
In addition, almost everything that you will be
doing in your business has a legal implication. Leases, contracts, credit,
banking, equipment ownership, real estate all have legal aspects which should be
understood. Establishing and maintaining a relationship with a lawyer is a
good business practice. When you need a lawyer to review one of these
matters, you will have that specialist available. It is far better to use
lawyers to keep you out of legal trouble than to wait to use them after you are in
trouble. For more information on this topic see your local SBDC.