It should come as no surprise to prospective entrepreneurs that starting your own business can come with some level of risk and seriously hard work, as a business lawyer New Haven, CT trusts from Eric Lindh Foster Law, LLC can attest. As a small business owner, there will be much to consider. You must take the time to plan the start of your business carefully. Not only will this help you lay the foundation for success, but you will also have a clear picture of how to navigate even the most challenging of situations.
Starting a business on your own can be incredibly overwhelming, which is why working with a business owner can play a crucial role in answering any questions you may have.
When an Idea Turns into a Business
At our law firm, we admire people who put in the work to start their own business. Businesses often begin with just a spark of an idea that eventually develops into something tangible and exciting! Once you have that idea, you may wonder what the steps are to making it come to fruition. Choosing and forming the entity of your business can be done on your own. However, once you get going and start hiring employees or start getting orders for goods or services, then you may want to consider speaking with a business lawyer for sound advice on how to protect what you have built thus far.
Choosing a Business Structure
Once your business idea has been formed, a lawyer from our team can help you choose which business structure is most ideal for your company. Most states have information online about the different kinds of business entities you can pick from, whether that be a sole proprietor, LLC, partnership, or corporation. Figuring out which structure will suit your needs depends on how many owners there are, financing, and what you are selling or services provided to consumers.
Business Name Availability
There may be nothing more disappointing than brainstorming about the perfect company name, only to find out it is already taken or your name is too close to another business that it would cause confusion. There are some legal steps in naming your business, but this can be quickly done with assistance from a lawyer. The initial thing you have to do is check whether your name is available in the state of Connecticut. There is a business name database online we can show you that lists business names already registered for the state. There are also instructions for how to check for the availability of a name and reserve your business name if you wish to do so right away.
Operating Your Business
After the business formation steps are complete, you can spend the energy getting your business running and strategizing the best ways to market your goods or services. We suggest browsing various online platforms to decide what kind of online presence you want to have. Some platforms are free, and others may charge a monthly fee. You can reach more people by having a website, Instagram, Facebook page, etc.
Depending on what your business does, we may need to help you draft contracts or agreements for the goods and services you provide. You may also need to obtain permits and licenses for your business. While there is information online about this, having a real person talk with you about your specific business circumstances can make all the difference in properly protecting your interests.
What is the best type of business structure for my business?
Choosing the structure of your business is the most important element in starting your own business. Your business lawyer can play a key role in helping you to choose the best business formation that works for you. Types of business structures include:
- Sole Proprietor
- Limited Liability Company (LLC)
What is a business plan, and what should be included in the plan?
When starting a business, you must develop a business plan. A business plan is a roadmap to your business. Not only does it help you to outline how you will start your business, but it will provide a roadmap for your future. A business plan should include:
- Executive Summary
- Description of Your Business
- Market Analysis
- Financial Plan
Why are business contracts necessary?
Business contracts are essential parts of any business. A business contract is an agreement that is made between two parties. Business contracts are incredibly important for several reasons:
- They offer both parties protection
- Clearly outline the terms of the agreement
- Help to prevent conflicts from arising
- They provide security to both parties
Should I hire employees, what do I need to know?
If your business is one that warrants employees, you will want to take the time to educate yourself on matters involving employment law. Managing employees can be challenging; if you do not have the proper understanding of employment laws, you could find yourself in hot water. In some situations, improper management of employees can be the downfall of your business. Working with a New Haven, CT business lawyer can assist you in understanding the critical components of employment law, including:
- Family and Medical Leave
- Workers’ Compensation
- Labor Laws
- Workplace Safety
- Civil Rights Laws
How can a business lawyer assist me with my startup?
As you know, there will be a lot to consider when starting your own business. While owning a business is a significant undertaking, it’s important that you at least consider the guidance of a business lawyer. While you may not want to take on the expense of a lawyer’s services, they can come with exponential benefits. A lawyer can help you to form your business structure in a way that works to your advantage in addition to ensuring that no omissions are made.
Starting your own business can be incredibly rewarding. However, with this newfound sense of freedom and excitement to be your own boss, also comes incredible responsibility. As a small business owner, you must carry the financial burden of owning your own business all on your own. Working with a business lawyer can help in mitigating this burden. Take advantage of the guidance a business lawyer has to offer by contacting an experienced professional today.
Pros and Cons of Different Business Structures
There are several different ways to structure your business. A business lawyer in New Haven, CT, at Eric Lindh Foster Law, LLC can help you decide which one to choose. Each has its own advantages and disadvantages. These are a few of the most common options.
With a sole proprietorship, there is no legal distinction between you and your company. This means that you pay personal income taxes on the profit that you receive from running your business and there is no need to file a separate form on behalf of the company. A sole proprietorship is easier to set up than other business structures and is the least expensive to organize.
The major disadvantage of a sole proprietorship is that you are personally liable for any claims against the company. This means that if someone else wins a civil lawsuit against your company, you must pay the damages out of your own pocket unless you have errors and omissions insurance.
A corporation is considered a separate entity from you, its founder. It is the most complicated and expensive business structure to create, and because there may be financial consequences if you make a mistake, you probably want to consult a business lawyer in New Haven, CT, during the process.
There are two different types of corporations: C-corporations and S-corporations. Both types limit liability for its owners and founders. This means that, if someone receives a legal judgment against you, only company assets are used to pay the damages; your personal assets remain safe. The major disadvantage of a C-corporation is double taxation: You have to file an income tax form on behalf of the company and then pay taxes on the profits you received on your personal income tax form. S-corporations avoid double taxation while still providing limited liability but are restricted in other regards.
At its most basic, a partnership is similar to a sole proprietorship except that, by definition, a sole proprietorship is run by only one person, while a partnership has to involve at least two owners.
There are different types of partnerships. A general partnership is the simplest type. In a general partnership, all owners share personal liability for damages and debts against the company. A limited liability partnership provides some protection to the owners’ personal assets.
The decision of which business structure to choose is one of the most important when starting a new company. It is also one of the first decisions you should make as it affects most of the other choices you have to make. A business lawyer in New Haven, CT, at Eric Lindh Foster Law can help you examine your options and make an appropriate decision.
3 Steps To Help Your Small Business Succeed
Small businesses make up over 95% of the American economy, making them the backbone of the nation. Nevertheless, many new start-ups fail within the first five years. At Eric Lindh Foster Law, LLC, you can speak with a business lawyer in New Haven, CT, who can explain the unique challenges you face and help you work out a strategy for success. There are other things you can do right away to help turn the odds in your favor.
1. Connect to Something You Are Passionate About
A lot of business gurus tell you to start by identifying a problem that you can help solve by starting a business. That’s not bad advice, but a competent business lawyer in New Haven, CT, will tell you to go a step farther and identify a problem that you feel very strongly about because it affects your life in a significant way. The more personally invested you are in trying to solve a problem, the harder you will work at it and the more dedicated you will be to the hard work required to make your business successful.
2. Identify the Unique Value You Offer
You may think that you have a completely original idea but before long, you may find that you have competitors in what you believed was a unique field. This could mean that other people are capitalizing on your success, but it is just as likely that the same problem that has affected your life is also motivating other people to try to do something about it. None of that matters to consumers, however. They will go to the company that offers the best goods and services, not necessarily who got out there first. Therefore, you should be able to identify what makes your company uniquely qualified and emphasize this when you communicate your message to potential customers.
3. Take a Public Role
Large corporations and conglomerates have a lot of advantages over small business owners. However, one advantage you have that they lack is that you are a real person with a face and a story. It is hard to connect with large, faceless corporations, and many consumers would much rather build a professional relationship with an individual. Therefore, you should not only be the founder of your company but its face. Share your story directly with customers and invite them to tell theirs as well. Start a conversation between you and the public and let them get to know you as a person.
It is difficult to start a successful company completely on your own. A business lawyer in New Haven, CT, from Eric Lindh Foster Law, LLC, can help you at start-up and stand by you during any legal challenges you may face later.
Qualities to Look for in a Business Lawyer
If you’re starting your own business, one of your first steps should be to hire a business lawyer. He or she can help you with the legal aspects of your business and protect your best interests. Here are several qualities to look for in a lawyer:
- Experience: Different business lawyers specialize in different fields. Some have experience in the technology field, for example, while others specialize in the retail field. Although it’s not required, you should still try to find a business lawyer who specializes in your particular field. This way, he or she will be aware of all the changes in your industry and give you the proper legal advice.
- Communicative: When you have an important legal question for your lawyer, you should be able to reach him or her fairly quickly. If you have to play phone tag or wait days for your lawyer to call you back, he or she probably isn’t the right person to help you. Additionally, a business lawyer should take the time to explain any legal terms you might not be familiar with. Dealing with the legal aspects of a business can be overwhelming, so it’s important to have a lawyer who thoroughly explains everything.
- Problem Solver: A skilled business lawyer should have excellent problem-solving skills. Instead of offering you mere compromises, he or she should be able to come up with solutions. When you’re drafting a contract or facing litigation, for example, you need someone to guide you and protect your best interests.
- Assertive: When your business is facing serious matters, like contract disputes, it’s critical to have an assertive lawyer on your side. Your lawyer should be able to stand up for your rights and not be a pushover.
- Workable Fee Structure: Before you hire a business lawyer, you should first make sure that you’re comfortable with his or her fee structure. The majority of business lawyers work on a mixture of hourly and fixed fee billing. For example, if your business is dealing with a very complex issue, like contract negotiation, it can be tricky for a lawyer to determine how much time it will take, so hourly billing makes the most sense in this case.
- Good Rapport: A business lawyer could be very skilled in the field, but if you don’t feel any chemistry, it might not be wise to hire him or her. It’s important for you to be able to get along well with a business lawyer so you feel comfortable voicing your questions and concerns. The better your relationship is with your lawyer, the better off your business will be.
Contact Eric Lindh Foster Law, LLC today to learn more about how a business lawyer in New Haven, Connecticut can be of help to you and your business!
What Is a FEIN, and Do I Need One for My Business?
Businesses can be formed and registered in many different ways, and they have to meet certain legal requirements depending on the method of formation and registration the owners choose. Some businesses, for example, need to have a number referred to as a FEIN to file taxes and meet other regulatory needs, while others do not.
A FEIN is a Federal Employer Identification Number and is sometimes referred to simply as an EIN. This number serves almost like a person’s Social Security number, except it is associated with a business entity. Most businesses need an EIN; except perhaps sole proprietors, who can use their Social Security numbers in place of an EIN for many of their business transactions. A business lawyer in New Haven, CT can determine what your business may require.
However, if you are a sole proprietor, having an EIN can help you keep your own personal information secure. There are transactions during the course of your business where you would be required to provide a tax identification number, and the EIN would meet this requirement without you having to give out your social security number. With the possibility of identity theft, the EIN can be a good security measure.
As a New Haven, CT business lawyer can explain, the IRS states that you will need an EIN, even as a sole proprietor if you meet any of the following criteria:
- You have employees
- You operate your business as a corporation or a partnership
- You file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms
- You withhold taxes on income, other than wages, paid to a non-resident alien
- You have a Keogh retirement plan
- You are involved with certain organizations
If you decide you need an EIN for your business, applying for one is not difficult and can be accomplished in a fairly short amount of time if you have all the information readily available. You can apply for an EIN by mail, fax, telephone, or online via the IRS website. There is no charge to apply for an EIN.
When your business is assigned an EIN, it becomes the permanent number associated with that business and is not given to other businesses, even when you do not use it. The IRS provides ways for business owners who no longer wish to use the EIN associated with their business to close out their IRS account on that EIN. You can use this option if you apply for an EIN and decide you do not need it, never use it, or your business closes down before you get a chance to use it.
To learn more, contact Eric Lindh Foster Law, LLC to speak with a New Haven, CT business lawyer. Call our office to schedule a free and confidential consultation.