A privacy policy is a legal statement that specifies what a company does with personal data collected from users or customers, how the data is processed and why. Violations of data protection laws can result in criminal liability – depending on your state, this can mean hefty fines – so it`s important that startups have appropriate privacy policies in place and adhere to them carefully. The Small Business Administration has a great guide to creating an appropriate privacy policy for your business. Legal incorporation of your business, entering into an agreement with your business partners, obtaining business licenses, and protecting your name, slogan, and other assets are all prerequisites for starting a successful business. Read on to explore each of these steps in detail. In addition, small business owners also have to pay state and local taxes, as well as federal taxes. These state and local taxes may include: Once you`re done creating a business plan, you`ll need to consider any legal requirements you need to meet in order for your business to operate legally. This can include anything from getting permits and licenses to getting the right insurance. You`ll be amazed at how many small business owners put their businesses at risk out of sheer ignorance of their legal obligations. So, if you want to avoid the legal issues that small business owners often face, you need to comply with legal requirements. Some of the most common legal requirements for starting a small business include: You`ll also want to learn more about the most common small business legal mistakes, which you can see in our infographic below: If you have employees (whether W-2 or independent contractors, depending on applicable law), you are required by law to obtain an employee settlement. Workers` compensation protects employees who may be injured on the job and achieves the following results: If a customer walks between the aisles of your store before slipping and injuring their back, your general liability insurance will protect you after suing you for damages. If one of your products is defective and harms the user, general liability insurance ensures that your business won`t have to close its doors while you revamp its entire manufacturing and logistics process.

Without adequate protection, your small start-up is vulnerable to legal challenges and intellectual property theft. Business insurance and proper oversight of the hiring process both protect against liability, albeit in different ways. You can register the entity name to protect the company name at the state level. You claim the name as your own and no other corporation may be incorporated under that name. Another way to register a business name is to protect the name. A trademark prohibits other industry players from using the brand name nationally. Depending on your type of business and location, you may need certain business licenses and permits from your country, state, county, or city. Licensing, approvals, and registrations come in many variations. Examples include local business permits, building permits, health safety permits, home business permits, fire safety permits, industry-specific permits (e.g., operating a law firm, hospitality, construction, or manufacturing), liquor licenses, etc. Company or employee handbooks are a great way to convey your company`s legal values and boundaries. It can also help determine what is and isn`t appropriate behavior internally and externally. Ask your legal counsel to thoroughly review this or even help you draft it, and then bring the company together to review the material.

Not sure how to perform some of these startup steps? It may be helpful to contact professional legal counsel to make sure your bases are covered. This allows you to spend more time planning, managing, and ultimately growing your business. Trademark and copyright infringement is not something that can or should be ignored, so every aspiring entrepreneur should take the time to make sure that the name they have chosen for their business is not already a trademark. If you start a new business and start promoting your business without checking if your name is already taken, you may receive a cease and desist letter or even a subpoena in the mail. Product liability insurance covers alleged damage caused by defective products and can be important for companies that manufacture and distribute goods of any kind. A federal trademark helps protect a trade name nationally. You can file a trademark application with the U.S. Patent and Trademark Office. While trademarks are not necessary to operate a business, registering a name can be a good idea to protect the exclusive rights that come with a trademark.