As a business attorney with 20 years of experience, I have had the good fortune to have worked with a lot of start up companies. Clients and friends alike frequently ask, “How do I start a business?” The answer always depends on the details of the business being started, but I wanted to provide some very general information so readers have a place to start learning what they need to know to build a solid legal foundation for their new endeavor.
This post will look at the preliminary issues to be considered, like business plans, legal structure, ownership issues and agreements, and licenses and permits. In the next post of this 2-part series, we will look at issues related to banking, financing, insurance, and employees.
Again, this is very general information. In order to provide more detailed information I would really need to know the specifics on the actual operation. After all, a business that sells shoes faces very different legal issues than a home improvement contracting business. So please use this information to learn, but when it comes time to pull the trigger, you really should get some specific legal advice from a business lawyer near you. My firm handles this kind of work and we would be happy to help with your Massachusetts business law needs.
Business Plan: This is probably the most important thing you can do to boost your chances of success. You need a good business plan. A business plan is like a map for your company to use as it wanders the uncharted territory of sales, growth, finances, marketing, and overall strategy. You can find a massive amount of information on business plans online, including templates and suggested language. There are also software packages and apps available that walk you through the business planning process.
Legal Structure: As an initial matter, you may want to consider what kind of “business entity” you want. You can form a corporation, limited liability company, partnership, or even form nothing and operate as a sole proprietor. A more detailed discussion of corporations is available here and a more detailed discussion of sole proprietorships can be found here.
Ownership: If you are going into business with a partner (or more than one partner) you will want to have a very good, detailed shareholder agreement (or operating agreement if you form an LLC). This will govern how the owners act in operating the business. Issues of compensation, performance expectations, sale of one’s interest in the company, valuing the business, and ending the business relationship are all what I call “Potential Areas of Conflicts” or PACS. It is always a good idea to address PACS right from the start. With 20 years of business law experience, we know the PACS and how to address them before they create problems.
Licenses and Permits: Depending on what kind of work your business does, there may be licensing requirements with which you must company. For example, home improvement contractors, medical services, food services, and yes, lawyers, all have specific licensing requirements. Again, an experienced, responsive business attorney can effectively assist you in complying with all of these issues.
If you are interested in discussing your plans with an experienced business lawyer, please feel free to contact me. I can be reached by phone at 781-562-1163. You can also email me by clicking here.
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