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