Are you an entrepreneur? Do you have a great concept that you’ve been itching to make into your own business? Is now the right time to make your dream of starting your own business a reality? Embarking on the journey of starting your own business is an exciting endeavor, but from day one, there are essential administrative and legal steps that should not be overlooked. Spending a little bit of time to think and work through these steps at the outset as you establish your company will pay dividends in preventing giant headaches and legal problems in the future. To guide you through this process, here are some frequently asked questions (“FAQs”) that aspiring entrepreneurs often ask us when we meet with them to assist them in making sure their business dreams become a reality and not a nightmare down the road because of a failure to plan properly.
A: In brief, sole proprietorships provide little protection from liability and will not be appropriate for most business owners as their business grows. A Limited Liability Company (LLC) can be a better option for owners who want to protect their personal and family assets, who anticipate expanding or adding additional owners and can have tax planning advantages. Additionally, corporations can be a beneficial structure where fundraising or a sale is anticipated in the future. In some instances, more specialized structures such as limited partnerships or joint ventures might be appropriate. For personalized guidance on choosing the right business structure, it's advisable to consult with a member of our Business Law Team.
A: Registration requirements vary depending on your chosen business structure. While sole proprietorships and partnerships may not require formal registration, limited partnerships, LLCs, and corporations have specific filing obligations with the Ohio Secretary of State’s office, the IRS, and the U.S. Department of the Treasury. This process is often frustrating and confusing for many new business owners. To receive guidance on these filing requirements to make sure your business is set up properly from the start, reach out to our Business Law Team.
A: Start by obtaining an Employer Identification Number (EIN) from the IRS, which is essential for tax reporting and to open a business bank account. Additionally, depending upon the type of business you plan to operate you may need to obtain vendor’s licenses from the county in which you plan to do business and/or the State of Ohio state tax obligations. We often take this on for clients as part of forming their business entity.
A: Depending on your business structure, it may be essential to implement a partnership agreement, limited partnership agreement, operating agreement, close corporation agreement, shareholders agreement, and/or bylaws to define ownership, responsibilities, and operational procedures, and to provide for restrictions on the ability to transfer ownership interests to third parties. These business agreement documents are vital for clarity and conflict resolution within the business to prevent disagreements or confusion in the future. You may also want guidance on drafting employment agreements, non-competition and confidentiality agreements, handbooks, and other documents for your employees.
A: You can safeguard your brand assets by filing a trademark application with the U.S. Patent and Trademark Office and/or the State of Ohio. Trademark protection grants exclusive rights and prevents unauthorized use or infringement. Without trademark protection, other individuals or companies may be able to seize your brand name, logo, etc. and utilize them for alternative purposes, causing harm to your business.
A: In general, trade secrets are proprietary information maintained by a business that has economic value, is not generally known to the public, and is reasonably protected—think your proprietary processes or ideas, your client list, etc. Protecting trade secrets is essential for safeguarding valuable information. Our Business Law Team can assist you to implement physical and cybersecurity measures, include non-disclosure provisions in contracts, provide employee training, and establish a rapid response plan to address any breaches. Starting a business entails navigating numerous complexities, but you don't have to – and shouldn’t – do it alone. Moreover, spending a little bit of time at the beginning of your business journey can save you time, money, and headaches down the road.
Our business lawyers are experienced and skilled not only at business creation, guidance, and transactions, but also at business and commercial litigation. Why does this matter? Our team understands what can go wrong and takes steps to protect you at the outset to minimize the chances of problems down the road. We know your time is best spent furthering your business, and we do everything we can to ensure you are protected while doing just that. Our Business Law Team is here to assist you every step of the way. Contact us at 330-455-6112 to explore how we can help you turn your entrepreneurial vision into reality.
Hunter Miller is an associate attorney focusing on commercial litigation, mergers and acquisitions, intellectual property litigation, and other practice areas.