For 36 years Ramsey Bahrawy has been practicing law and advising small businesses on everything from business formation to real estate contracts. Now he shares his expert advice.
(Photo courtesy of Ramsey Bahrawy)
I am opening a new business. I read all the stories about people being ‘sue happy’. What is the best thing I can do to make sure I am not sued?
You really can’t completely avoid a lawsuit. However, you can avoid putting your personal assets at risk by having the business organized as a corporation or an LLC or an LLP. Also, make sure you have liability insurance.
May I pick any company name I want for my business?
Unfortunately, you can’t choose any name you want. You need to do a search to determine that the name you want to use isn’t already being used or isn’t too similar to an existing business name. I suggest checking the database of the State Office of the Secretary of State, as well as the Trademark Office. If your name is important, you may also want to consider trademarking your name to avoid anyone else from trying to use it. And if someone infringes on your trademark, you are entitled to be compensated.
Would it be a problem, if at some future date, I decide to bring in partners?
Your bylaws and articles of organization should set out the terms of any partnership or investment arrangement. This includes what happens if a partner or investor decides to leave your business or passes away. Do you want to be partners with his or her spouse? Probably not.
I am planning to have employees. I know I have to withhold taxes. Is that all I have to do?
You should be working with an accountant to make sure you are complying with the state and federal tax laws. You also need to become familiar with labor laws and laws regarding hours and wages. I can provide you with a primer regarding these laws as well as discrimination and harassment laws. State and or federal statutes may require that you have certain statutory language posted at the place of employment.
I am planning to get a business loan. What can I do to ensure I am not personally liable?
First, you will need a business plan, whether you create one yourself or hire someone to develop one. A business plan is a very useful tool that can help you foresee potential pitfalls. Being familiar with your business as well as your plan will allow you to speak effectively to potential investors, clients and customers. Given that your business is young, a bank is not likely to give your business a loan unless you sign personally and put up collateral.
This article was written by Robin D. Everson of Examiner.com for CBS Small Business Pulse.