When starting up a business it is important to understand how the existing legal systems in your jurisdiction work and how they may affect your business. You should, therefore, be sure to perform thorough research and understand the laws in the U.S works and how they may impact your ability to open and run a business there. And when in doubt about anything, the services of a business lawyer should be sought after to help explain anything that you are uncertain about.
Having said that, here are the top five legal considerations when thinking of opening up a business in America. This is by no means a complete list, these are just a few very important ones.
Taxes and Legal Environment
First and foremost, you’ll need to make sure you meet the legal requirements that are in place to establish a business. This can include things like taxes, business licenses, permits and others. While every business and industry is different and specific permits or licenses will be applicable only to specific types of businesses or those in specific industries, it will be entirely up to the business owner to determine what permit or license they need to get to run their business and failure to do this or claiming ignorance about this fact, will not remove the penalty or consequence they are likely to face if they are found out.
Having said that, there are different factors you must consider when determining if and/or what licenses and permits your business will need to get, including what tax regime will govern your business. Some of these include:
- The State of the business
- What industry it operates in
- The type of business and the specific business activities it engages in
- The extent of your business involvement
- The total size of your business
- The total market size of your business
- The amount of your planned investment
Be prepared
If you have an idea for a particular business and are ready to take the plunge, there are perhaps several things you need to take care of before, or at least, in the early days of going live with the business. One example is tax matters. Filing your taxes can be a complicated thing and it is no wonder why many people often hire a CPA to do their taxes for them as they are unwilling to take the time or energy to go through the process, or even to learn to go through it. There are usually so many different forms and sections in these forms that you might not know what to do.
In the case of filing your taxes, for instance, one clear example of, and area of confusion is in the area of classifying your business. Many small business owners often do not realize that they need to start their business with a “beneficial owner” or joint owners. This is because if you start up a business without either of these, you’ll need to file a complete 1040 and pay federal taxes. If your company has only one owner, you’ll be taxed on your earnings according to your schedule of owners. You’ll be treated as a sole proprietor for tax purposes.
Have a firm plan and stick to it.
Anyone who has ever run a business successfully knows that plans matter. Drawing up a plan and sticking to it is an integral part and ingredient of attaining success in your business. The lawyers of Hutchison & Stoy, PLLC., who are Fort worth lawyers advise business owners to follow the plan they have developed for their business, insofar as it is working for them and getting them closer to their goals. But, they advise that you should not be afraid to ditch a plan that is not getting you closer to your goals, and instead, should pivot your plan in line with the realities of your business at any particular point in time.
Qualified Immunity – As a foreign company, you have no legal rights under U.S. law. Nonetheless, due to this difference in status, you may want to ask for a waiver of some or all U.S. tax liabilities if:
- your company’s activity is legal under your home country’s law.
- your company has reasonable evidence of compliance with the law of the foreign country where its foreign base is located.
Insurance
This may or may not be a requirement and it will be up to you to verify the exact situation as it concerns the specific type and nature of the business that you want to run and the regulations that govern it. Insurance coverage is often a significant driver for costs for small businesses and startups but is usually very important and can contribute to the survival of the business.
There are a variety of different insurance types that can be purchased that fall into one of three categories: umbrella, full or group. The most common umbrella insurance plan is referred to as a life insurance policy and includes multiple forms of coverage, a pool of cash for accidental death or personal injuries, or death benefit coverage for employees. It is usually advisable for a new business to buy appropriate insurance cover to protect your business against various business risks.
