Legal Considerations For Beginning A Business

Five million new businesses were launched last year. That is a staggering number even when compared to statistics before Covid. (The Census Bureau estimated that 2022 marked a 42% increase when measured against pre-pandemic data.) Many people may shy away from becoming an entrepreneur simply because it isn’t part of their career aspirations. Others may think they can’t become one. As eager as they are to begin, they dismiss it because they assume it’s something for other people. 

Some of these same individuals will have a moment when they realize that anyone—including themselves—can start a new business. We’re not saying they will all succeed, but the opportunity exists. Though the roadblocks will be significant and seemingly impossible at times, it is possible. The path to get there will be impacted by the following:

  • The idea and business plan 
  • Branding and intellectual property 
  • Market research
  • The level of networking and the relationships they have built 
  • Background skills and expertise in their respective fields

However, the legal considerations that you have to undertake are the same for everyone. If you have had that moment where you have realized that you can start a business, here is what the next steps look like. 

Key Legal Considerations

It is important to note that a business law attorney will assist you with everything we are about to discuss, and no one expects you to go at this alone. To be successful, surround yourself with good people, including an attorney. 

There are several legal structures to choose from:

  • Sole proprietorship 
  • Partnership
  • Limited Liability Company (LLC)
  • Corporation 

Take into account that there are unique legal requirements and implications for each one. Regarding the latter, we are referring to taxation, liability, and record-keeping. Ultimately, business entities allow you to separate your assets from those in the business. If your business gets sued, you can prevent them from coming after your personal assets, such as your home. (This does not apply to a sole proprietorship.)

When you land on a name, it must comply with Illinois’s laws. Before registering, your attorney will help you check if your chosen name is available through the Secretary of State’s office. (This is not the same as obtaining a registered trademark.) Depending on the type of business  you want to open, you will likely need specific licenses and permits before you can begin operating. Again, an experienced business law attorney will review your needs while explaining the acquisition steps. 

If you intend to hire people, you must start familiarizing yourself with federal and state employment laws. This includes wage and hour regulations, workers’ compensation insurance, unemployment insurance, and employment taxes. Regarding taxes, you will register with the Illinois Department of Employment Security (IDES) for withholding and reporting them. The amount of taxes you pay is tied to your choice of entity. You will also receive your Tax Identification Number (TIN) by registering with the Illinois Department of Revenue (IDOR). Ask your business law attorney for advice about how to remit sales tax, withhold income tax from your employee’s wages, and file business tax returns. In all likelihood, they will give you a specific overview of the process and could potentially recommend you to an accountant who will work with you and your business. 

Take the Next Step 
There is a stark difference between beginning and maintaining a business. For example, you may have to identify zoning issues for your business’s location before you launch, but you need to have reliable contracts, intellectual property, and data protection, all while you maintain your compliance with regulatory agencies. Fortunately, Jayaraman Law can assist you with starting and staying in business. For more information about our outside general counsel services, contact our office to set up a free consultation. You don’t have to do this alone; we want to support you and your business.

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Jayaraman Law

Jayaraman Law focuses on Estate Planning, Business Planning, and Real Estate. Each is executed with a passion for advocacy and serving clients. When your future depends on it, you need an experienced attorney. Our background is rooted in both the private and public sectors. Let our know-how be your greatest asset.