Three Key Elements of a Successful Business Launch
Growing a successful business requires a solid foundation from the start with these first three steps:
- Selecting the right type of business entity for your situation
- Checking that your business name is available for registration
- Filing for a tax ID number and all business licenses
Forming a legal business entity can protect your personal assets from lawsuits related to your business. In addition, using a legal entity, such as an Limited Liability Company (LLC), may provide you several important tax benefits. And finally, having a business entity conveys a greater level of professionalism.
When you sign up for Launch by LegalShield, a provider attorney will handle the entire entity formation process for you. Besides eliminating guesswork and stress, you’ll rest easy knowing that everything was prepared and filed correctly.
Some people start their entrepreneurial journey with a sole proprietorship, conducting business under their own name and social security number and reporting their business taxes on their personal tax returns. However, even the smallest businesses should strongly consider forming a more sophisticated business entity. When set up and managed correctly, legal entities can shield your personal assets from business lawsuits and provide significant tax benefits.
But which business structure is right for you? Here are the common options and their respective benefits:
- Limited liability companies (LLCs) shield against personal liability when operated correctly, and offer flexibility in ownership, management and taxation options.
- Limited liability partnerships (LLPs) also offer protection against personal liability, including from other partners, but are often limited to certain professions.
- C-corporations limit your personal liability and allow you to issue stock to raise capital.
- S-corporations similarly limit liability and permit stock issuance, and allow for pass-through taxation.
- Benefit corporations have the benefits of C- and S-corporations and can appeal to investors and customers alike with their stated goals for social and environmental good.
- Non-profit corporations protect founders against liability and are exempt from property and income taxes so long as they maintain their non-profit status.
Once you know which type of business entity is best for your situation, you need to make sure the required paperwork, such as articles of organization or incorporation, are created and filed correctly and the requisite filing fees are paid. Failure to follow all applicable legal requirements can render your liability protection null and void.
While this may sound daunting, there is a simple, affordable solution. For only $145 + state filing fees, Launch by LegalShield connects you with an experienced provider attorney that will help you select the right business structure, create all necessary paperwork and file everything with the secretary of state or other appropriate governmental body in your state. On top of forming your entity, you get three months of legal support for a whole host of common business tasks you’ll need to complete beyond launching your entity.
Ready to launch?
When you form any business entity, you must choose a legal name for the business. However, that legally required name does not have to be the only one associated with your business. It’s important to understand the various types of names as each addresses different requirements:
- The name you use to form your entity is the business’s legal name and protects you at the state level.
- A voluntary assumed name (aka ‘doing business as’ or DBA) allows you to operate your business under a name other than the business's true legal name while maintaining your liability protection. DBAs can be helpful when your business's legal name is not a good consumer facing brand name or if you want to operate several businesses with different names under one legal entity. Most states require you to file a special form to connect a DBA with your legal entity.
- A Federal Trademark can protect your business at the federal level against other people trying to use your brand name.
- A domain name is simply your business’s website address and does not give you automatic rights for that name. While most businesses have websites and strive to have a domain name that matches their brand name, websites are not required by law and your domain name does not necessarily have to match the business's true legal name or DBA exactly.
Like forming an entity, you need to make the right decisions and then file the paperwork correctly to get the legal protection you need. Working with an experienced small business attorney is a smart way to make sure you get your business name right.
Rather than stressing and guessing, sign up for Launch by LegalShield. A provider attorney will conduct a business name search to make sure the name you want is available and won’t infringe on existing copyrights or trademarks. Once you have decided on a naming strategy, a provider attorney will file the appropriate paperwork to help you prepare to start your business.
Enjoying the legal protections and tax benefits legal business entities provide requires you to jump through a few additional hoops. A Federal Tax Identification Number, also known as an Employer Identification Number (EIN), allows you to open a business bank account, file federal taxes separate from your personal taxes, apply for business licenses and permits and legally hire employees. It’s critical to starting and maintaining your business over the long-term while allowing for scalability.
Depending on your state and industry, your business may require additional business licenses and permits. Common licenses and permits include general business licenses, sales tax licenses, health department permits and liquor licenses.
- How do you get a tax ID number?
- Which licenses and permits are required federally and at the state or local level?
- Where do I get all the federal and state forms forms and apply for licenses and permits the business needs?
Launch by LegalShield members don’t have to worry about any of these questions because a provider attorney gives the advice and guidance you need to navigate federal and state filing requirements. A provider attorney will even apply for and secure your federal tax ID for you as a standard part of your launch plan and can review any other applications you prepare on your own.
Legal Support to Fuel Your Success Beyond Launch
Unlimited Legal Advice for Common Business Circumstances
Even the smallest, simplest businesses need legal help beyond forming a legal entity. Here are some common needs that pop up for most businesses:
Unlike any other “start a business service,” Launch by LegalShield includes three months of a Small Business Legal Plan. The legal plan allows you to call a provider law firm to get legal advice on an unlimited number of legal matters. If you start a business, you will have many important legal questions. With Launch by LegalShield, the answers you need to keep moving forward will be only a call away.
*This does not include designated consultations on certain areas of law or out-of-state business matters which you can receive a total of 3 such consultations per membership year of up to 1/2 hour each.
Contract Review and Legal Representation that Drives Growth
When you need to draft a sales contract, negotiate the terms of a lease with a landlord or hire your first employee, LegalShield has your back. The small business legal plan that is included with your launch package includes the following additional legal services.
- Submit business legal documents (up to 15 pages each) for review by a provider attorney**
- Fill out any document template from our website and have a provider attorney provide feedback
- Have a provider attorney write letters or make calls on your business's behalf***
**Up to 6 per month, with the total of 20 per membership year. Preparation of business legal documents is provided under the 25% preferred member discount.
***Up to 6 per month, with a total of 20 such letters or calls per membership year. Debt collection letters are not part of this benefit. Up to five debt collection letters are also included each month at no additional charge.
While you can find a variety of services that will provide you an online form that spits out generic entity filing documents, none of them will provide the “real” one-on-one legal services that Launch by LegalShield includes for no additional fee. There really is no comparison.
Ongoing Legal Support for All Stages of Business Growth
Once your business leaves the launch phase, it will enter the orbit of ongoing operations. Ongoing operations raise new challenges that your LegalShield Small Business Plan can help you with.
- One hour of legal research on each matter is included at no additional charge. This does not include designated consultations on certain areas of the law or out of state matters which you can receive a total of 3 such consultations per membership year of up to 1/2 hour each.
- Speak with a provider attorney on an unlimited number of business legal matters
- A provider attorney can write demand letters to help with your debt collection efforts***
- A provider attorney can make calls or write letters on behalf of your business for other business legal matters such as issues with employees, clients, vendors or any other third parties.***
- Your attorney can support you during IRS audits and, with our SMB Plus and Pro plans, represent you at trial should your business be a named defendant in a covered civil trial.
To continue to have access to these legal services beyond the first three months, while optional, it will be important to maintain your small business legal plan. Membership fees for a Small Business Legal Plan start as low as $49.00 per month. Plus, you’ll enjoy a preferred member discount of 25% off the standard corporate hourly rate of a provider attorney when needed for additional needs fees and 100’s of Member Perks that can save you more money on popular products and services than the cost of the plan.
An experienced provider attorney in your local area will have your business entity up and running quickly and correctly.
LegalShield has helped over 50,000 business owners successfully navigate the legal challenges that many businesses face. With over 50 years in business and 39 provider law firms in all 50 states, we can provide access to help with your business legal needs.