Starting a business is an exciting endeavor, and there is often plenty of work involved to make that dream a reality. One of the most foundational components of starting a new business is getting the legalities taken care of upfront. No matter how innovative your business concept, you will not get very far without legal compliance from the outset, including gathering the legal documents needed to start a business. Fortunately, Grabbe Law Office has the legal insight and experience to help you get your new enterprise off to a solid start.

Taking the Plunge and Starting a New Business

Making the major decision to start a business should never be entered into lightly. There are a lot of components involved in developing, creating, and growing a business. Additionally, running a business successfully will likely keep you too busy to reconfigure your infrastructure at a later date. Taking the time to get it right from the planning stages can go a long way toward cultivating a legacy of success for your business endeavor. Owning your own business has many rewards including:

●     Being your own boss

●     Letting your passions guide you

●     Opening yourself up to limitless opportunity

●     Choosing who you hire and work with

●     Becoming financially independent through your own visions and dreams

Starting your own business, however, is not without risk. One of the surest ways to protect your financial investment and sweat equity is by giving the less-exciting administrative and legal tasks the attention they deserve. Your early efforts can make a world of difference to the success of your business endeavor.    

Defining Your Business Structure

Before you begin creating legal documents for your business, you will need to define your business structure. While the Small Business Association (SBA) provides in-depth information about all your business structure options, there are two most commonly chosen primary business structures.  

Limited Liability Company

A limited liability company (LLC) protects you personally from liability in most circumstances, which means that if your business is ever sued or ever files for bankruptcy, your personal assets will be shielded from risk. An LLC is one step beyond sole proprietorship, which can amount to a freelancer operating under his or her social security number.

Corporation

A corporate business structure, of which there are several varieties, provides the most personal financial protections. These structures, however, are both more complicated and more expensive to form. Your corporation will file income tax returns that are separate from your personal taxes.

Which one you choose will depend highly on your projected income, tax consequences that your tax professional can foresee, how many members you will have or project to have and what level of mandatory requirements you are prepared to follow through with.

Registering Your Business Name

One of the first tasks you will take on after establishing the structure of your company is registering your business name. This involves choosing a name that is on brand and unique to your business and then registering it with the Secretary of State. In Kansas, there is no business name registration. Instead, you can (for a small fee) reserve your business name for up to 120 days (if it is available) – until you are ready to move forward with forming your business entity. From here, you will move on to completing all of the following tasks:

●     Applying for your federal tax ID number, which is known as your Employer Identification Number (EIN)

●     Applying for your state tax ID number

●     Obtaining all necessary business permits and licenses pertinent to your industry

●     Protecting your business with appropriate insurance coverage

●     Opening a bank account for your business

An important part of this process involves correctly selecting and executing the legal documents needed to start a business. Consulting with Grabbe Law Office ensures that you provide your business the legal protection it deserves.

Common Business Start-Up Legal Documents

There are three primary legal documents you will need to move forward with your new business, including:

●     Articles of Incorporation – Your Articles of Incorporation legally establish your business as a corporation (if this is the business structure you chose) in the state in which you formed, verify ownership, define business activities, and delineate the issuance of company stocks.

●     Operating Agreement – Your Operating Agreement is an agreement between the members of your LLC (if this is the business structure you chose) that delineates how you will follow through with your business obligations and that allows you to avoid the state’s default rules.

●     Articles of Organization – Your Articles of Organization help establish your LLC at the state level and serve a purpose that is similar to a corporation’s articles of incorporation.   

Unique Documentation for Your Business

There are also some other unique documents that you should consider creating for your business in order to ensure its financial success and legal protection.

Business Plan

A Business Plan provides your company with an outline that can give shape to your business vision, attract investors, and secure traditional financial backing, such as bank loans. Generally speaking, your Business Plan should address the following:

●     The need your business fills

●     Your business’s unique approach to filling this need

●     Why your business is uniquely well suited to filling the need in question

Partnership Agreement

If you have a business partner, you will need a Partnership Agreement. Running a successful business is an immense endeavor and having a partner whom you trust in your corner can be very beneficial. Having a partner or partners, however, can also lead to clashes, which makes having a Partnership Agreement essential. While such an agreement cannot stop problems from arising, it can help guide how they are resolved.

Buy/Sell Agreement

Businesses evolve, and while you and your partner may be on the same page right now, life has a way of intervening. A Buy/Sell Agreement can spell out how the matter – whatever it is – will be resolved when the time comes. Your Buy/Sell Agreement can go into specific detail regarding all of the following issues:

●     A partner who wants to sell

●     A partner who declares personal bankruptcy

●     A partner who passes away unexpectedly

●     A partner who divorces (and whose percentage in the business is deemed marital property)

●     A partner who chooses to retire early

●     A partner who becomes ill or is injured and can no longer contribute to the business

Having a strong Buy/Sell Agreement established can help address these future concerns and challenges.

Additional Legal Documents

Additional documents that can play a pivotal role in your business’s ongoing success include:

●     An employment agreement that specifies the terms of employment and delineates your employees’ responsibilities

●     An employee handbook that reflects your corporate culture, guides your employees’ efforts and establishes your expectations as an employer

●     A non-disclosure agreement that helps protect the proprietary information and work product your company shares with partners and employees

●     A non-compete agreement that limits your employees’ ability to work for competitors within a certain geographical range and for a certain period of time

●     Your terms of service and privacy policies, which govern the terms and conditions that apply to customers who use your company’s website or mobile app

Reach Out to an Experienced Business Attorney Today

Starting a new business is a big step that can be as personally rewarding as it is financially beneficial. Heading into a business venture of this magnitude without the necessary legal counsel, however, can cause substantial and complex legal issues in the future. The Grabbe Law Office is well prepared and well-positioned to help you compile the legal documents needed to start a business and to help you soar in the process. To learn more, please do not hesitate to contact or call us today.