Ever wonder why you need to consider the law in starting your own business? The answers is very simple, a business establishment shall comply with the laws of the country where they wish to operate. Failure to comply with laws of the land shall decline the issuance of business permit. In order to legally start the business, consider the following factors you need to settle first before going any further:
1. Business Name
You must first try to create a unique name for your business. You need to make sure that the name you’re going to use is not yet registered in the records of the Secretary of the State. If you’re decided what business name you should use, you can reserve the name with the Secretary of State for 120 days while you are preparing for the articles of incorporation, articles of organization, or a partnership agreement.
2. Business Structure
You need to decide what business structure is best for your business. It can be sole proprietorship, partnership, limited partnership, corporation, S-corporation, or Limited Liability Company. This is for the purposed of determining the extent of the liability of your business. This can also help you to know the best tax structure for your business.
3. Business License
Basically, you need to obtain a business license and tax registration for your business. However, there are other required licenses which may depend on the nature of your business. You also need to consider the requirements for establishing a business as prescribed under your specific state laws.
4. Non-Disclosure Agreement
Before entering into any contracts with your suppliers and the like, make sure that you have a non-disclosure agreement and have them signed the agreement. This is to protect the confidentiality of your business. I bet you don’t want to end up being a loser knowing that your supplier informed your competitor on the types and number of supplies you have ordered from them.
Local zoning ordinances and regulations are important considerations when choosing your business location. Zoning laws impact several critical business decisions such as purchasing property or making improvements to your existing property, so it is important to understand the laws before you commit to anything. You can find out how property is zoned by contacting your local planning agency.
These factors shall be followed accordingly, however, keep in mind that there are other factors to consider depending on the state where you want your business to be located. Failure to comply shall affect the legality of your business.
Contracts should be based on the laws of the land where it is celebrated or enforce. An enforceable business contracts are essential to your business company’s defensive and offensive strategies. One example of which is the non-disclosure agreement, this is an agreement between parties to keep all trading secrets between them. The purpose of this contact is to protect the interests of both parties against their competitors. Moreover, business contracts must have enforceable clauses to protect their company from customers in claiming something from the company.
The United States laws on contract regulate the obligations of parties as established by the agreement set forth on their specific contacts. The laws are different from one state to another and there is no specific federal contract law the covers the generic required elements for contracts in the entire United States. However, the contracts on the sale of goods have standardized for most states through the adaptation of the Uniform Commercial Code.
To have a binding and legally enforceable contacts there are elements that should be existing in creating the contract. For the purpose of giving you generic information, here are the elements of a contract:
1. An Offer – One party must promise to do or refrain from doing some specified thing in the future, conditioned on an act, forbearance, or return promise given in exchange. Offers must contain sufficient terms, such as price, quantity, quality, time and place of delivery, in order to determine the specific obligations to be created.
2. Acceptance – The agreement by one who receives an offer, by express act or implied conduct, to the terms of the offer . Acceptance is an offer recipient’s agreement to perform according to the terms of the offer, and the act of acceptance of a valid offer creates a binding contract.
3. Consideration – Something (such as an act, forbearance or a return promise) that was bargained for and received by each party to a contract. Consideration must have a value that can be objectively determined. For example, a promise of love or affection is not enforceable because of the subjective nature of the promise.
Business ownership considerations can be a source of complication and conflict, particularly when it comes to allocating control, financial returns as well as potential liabilities. In a private company these issues can be clarified using articles of association or a shareholder agreement, as well as by issuing different classes of shares. In a partnership, a written partnership agreement serves a similar purpose.
In business operation, disagreements between owners, partners or shareholders certainly arise. Many disputes can be avoided by choosing the appropriate organization for your business. However, there are other issues that cannot be foreseen and will just arise while at the course of running the business. Financial crisis is the most common reason for an ownership dispute. Sometimes this reason may lead to the bankruptcy of the business itself.
Business ownership disputes arises when one or more business owners;
- wants to sell to a non-owner
- goes bankrupt
- who is also an employee, quits
- who is also an employee, is fired
- becomes disabled
- wants to buy you out
- wants you to buy him or her out
- gets divorced
- sells to a disqualified owner in a subchapter S corporation
- sells to a non minority in a minority owned business that relies on government
- minority set asides
Typically, business ownership disputes need to be resolved as quickly as possible to avoid disruption of the daily operations of the business. The litigation process can be expensive and the best way to settle the issue is mediation. This is because an owner of business and partnership wants an amicable settlement in order to continue their services to their customers.
On the other hand, if they weren’t able to resolve the dispute, owners may decide to continue or totally dissolved the business. However, remember that in partnership, if one of the partners objects to the continuance of the business the other partners must adhere to this.
Lastly, if your company is going through this kind of disputes, it is best to seek legal advice so you can be assisted with the right process appropriate for your company’s issue.