| I've gotten several questions recently about | | | | correctly. You may have heard about the |
| the legalities of starting a business. So, | | | | "corporate veil," which means that you can't |
| this week I thought I would address a few of | | | | be sued personally for anything that happens |
| the more common legal issues most new | | | | in the corporation and your personal assets |
| businesses face. But first, let's get the | | | | can't be attacked by creditors or a lawsuit |
| mandatory legal disclaimer out of the way: | | | | on the corporation. But in order to have this |
| the advice dispensed by this columnist is | | | | protection, you must act like a corporation. |
| probably no better or worse than the advice | | | | This means conducting board meetings, taking |
| dispensed by other columnists. Do not take | | | | notes and publishing minutes in your |
| the following advice as gospel or bet the | | | | corporate book.In addition, be sure to have a |
| future of your business on any advice given | | | | separate corporate checking account and, if |
| herein by said columnist.Agreed? Good, let's | | | | you need them, corporate credit cards. Don't |
| proceed.To begin, here's the best legal | | | | use corporate money for personal purchases, |
| advice I can give you as a new business | | | | and vice versa (unless you file an expense |
| person: find yourself a good lawyer and make | | | | report). Many people think they don't need to |
| him or her your very best friend. Granted, | | | | go to all this trouble if there is just one |
| your new best friend will charge you an | | | | or two people in the company, but in order to |
| hourly fee for chatting on the phone or | | | | be treated like a corporation, you must act |
| talking business over lunch, but you'll find | | | | like one. Your attorney can give you more |
| it to be money well spent. A good attorney | | | | details.How do I register my company name? To |
| can save you far more than the cost of his | | | | register your company name simply contact the |
| services. I rarely make any decision that has | | | | office of the Secretary of State. This is |
| the potential to impact my business without | | | | easily done by phone. The registrar will tell |
| first consulting my attorney.You can locate | | | | you if the name you have in mind is available |
| an attorney through legal referral services | | | | as a corporate name and will reserve the name |
| or just by opening the phone book, but the | | | | for you if it is available. You will be sent |
| best way to find a really good attorney is to | | | | a form to complete and submit with a nominal |
| ask other business owners for references.You | | | | fee. For more information you can also visit |
| want an attorney who specializes in business | | | | the Secretary of State's website.Do I need a |
| matters. A few of the things you may need | | | | business license? Nearly every business will |
| legal help with are: legal business | | | | require a county or city license. Luckily, |
| formation, articles of incorporation, | | | | such licenses are relatively easy to obtain |
| trademarks and copyrights, investment | | | | and are not expensive. For local licensing |
| documents, employee policies, etc. You may | | | | requirements, contact your city or county |
| find that a single attorney can't meet all | | | | government offices.Some businesses might also |
| your needs, but if you use a larger firm they | | | | require a state license. For example, hair |
| will have attorneys on staff that can provide | | | | stylists, contractors and most businesses |
| the specialized services you require.Now, | | | | serving food fall under the purview of the |
| let's take a brief look at a few questions | | | | state licensing board. Each state has an |
| I've received regarding the legalities of | | | | agency that deals with these types of |
| starting a new business.What's a DBA? "DBA" | | | | businesses. Contact your local government |
| stands for "doing business as." A DBA is | | | | offices to see if your particular business |
| another name that you use in the operation of | | | | requires a state license.Some businesses will |
| your business other than the legal name. For | | | | even require federal licensing. Examples of |
| example, "Jones, Inc." might be the legal | | | | such businesses would be those that provide |
| corporate name of your business, but you | | | | investment advice or that deal with firearms. |
| might use "Bob Jones Landscaping" as the | | | | Federal licensing is typically required for |
| everyday business name. In this case, you | | | | businesses that are highly regulated by the |
| would see the business described in legal | | | | government.I operate my business out of my |
| context as "Jones, Inc. Doing Business As Bob | | | | home. Do I still need a license? Operating a |
| Jones Landscaping."Here's an example of using | | | | business out of your home does not get you |
| a DBA to launch a new venture within an | | | | off the hook when it comes to licensing. You |
| existing business. A reader asked: "My wife | | | | should check local zoning requirements and |
| incorporated a multimedia business three | | | | property covenants. You can find this |
| years ago, and I am starting a voice-over | | | | information at the court house or by calling |
| business. Is it more beneficial for me to | | | | your local license department. Home |
| open as a sole proprietorship or to operate | | | | businesses are also subject to zoning laws |
| within her multimedia business?"My answer was | | | | that regulate how property can be used and |
| that he should open his company as a division | | | | may restrict various activities.This is just |
| of his wife's business, operating as a DBA. | | | | a sampling of the legal issues that must be |
| Even though he is using his own business name | | | | addressed by every new business owner. To |
| (the DBA), technically his wife's corporation | | | | learn more, take your favorite lawyer to |
| is launching the service and therefore will | | | | lunch.Just be prepared to pick up the |
| give him some liability protection. Doing so | | | | tab.Here's to your success.Tim KnoxTim's |
| would also help him save on start-up costs | | | | latest book is "The 30 Day Blueprint For |
| (such as having to pay for a separate | | | | Success!" We asked 58 Top Internet Money |
| incorporation). It's relatively simple to | | | | Makers: If you lost is all tomorrow and had |
| keep a separate set of books, and when the | | | | to start from scratch, what would you do to |
| new business takes off, he can spin it off | | | | be back on top in the 30 days? Their answers |
| into a separate entity.Will a corporation | | | | just might make you rich! |
| protect me from liability? It can, if handled | | | | |