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Legal issues you might encounter when starting a business

On Behalf of | Apr 27, 2021 | Business Law

Starting a business requires more than a good idea and some money to invest. It is a complicated process with numerous steps, many of which include legal issues. Thus, anyone looking to start a business can should have a basic understanding of some of the legal issues they might encounter.

Business structure

One of the most important steps for starting a business is determining how to structure your business. There are a variety of possible business structures including sole proprietorships, partnerships, corporations, and limited liability companies (LLCs).

The business structure will ultimately dictate the legal rights and responsibilities of its owners and investors, as well as the level of personal liability they will be subjected to.

Owners and investors of Corporations and LLCs, for example, will not be personally liable for the actions of the business or its employees. Alternatively, sole proprietorships and partnerships, do not provide its owners with the same protections.


Starting a business will also involve the signing and drafting of numerous contracts. Some contracts that a new business will likely encounter include: employment contracts, commercial real estate contracts, partnership agreements, and contracts for goods or services.

While not every agreement must be written in order to be a legally enforceable contract, it would be unwise rely on oral contracts. Written agreements not only allow for easier enforceability, but also clearly express the responsibilities of each party. Accordingly, it is important to carefully read or draft any and all contracts before signing them, as well as have a clear understanding of all terms.

Other issues

There is a range of other potential legal issues associated with starting a new business. Depending on the type of business, it may be necessary to obtain a license or permit. You will also need to also consider tax implications and state laws. An experienced attorney will be able to provide guidance on all legal issues associated with starting a business.


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