AS THE ECONOMY BOOMED, many completed dreams of starting their own business and others invested in those starting a business. If either applies to you there are a few issues and decisions to address quickly. The Frisco business lawyers at Albin Oldner Law have years of experience helping entrepreneurs in Frisco and throughout Texas set up their businesses in the smartest way possible. Below we discuss 4 key elements to consider when forming a business.
1. Licensing
It is important for your business to be licensed correctly with the local government and industry licenses necessary to operate your company. Ensure your business is created correctly and filed with the Secretary of State of Texas. This includes filing the appropriate Articles of Formation and executing additional corporate documents so that your entity is licensed to operate in Texas, has an EIN for taxes, and is correctly created to affect its purpose of protecting individual members from personal liability.
2. Copyrights/Trademarks/Naming Rights
When initially naming your business, it is critical to research the right to use the name and any copyrights or trademarks related to prior use of the name or product. If you think of a name, it’s entirely possible that another business already owns the copyright, trademark or has priority due to prior use of the name. It’s imperative to discover this before investing substantial amounts in marketing and website creation, only to end up with a demand letter to cease use or be sued. The cost to relaunch or change names can cripple a young business, but a lawsuit almost certainly ends its future.
3. Employee/Independent Contractor
As you begin hiring, initial budgets often require using independent contractors with the idea that you pay a set amount, and the independent contractor is responsible for their own taxes and liability. The key is to make sure you classify independent contractors or employees correctly as far as the government is concerned. The law has provided some factors to help determine the difference between the two, but it’s not an exhaustive list and, at its heart, is focused on whether the employer controls how the person performs the duties, making them an employee. Along with consulting an attorney, read the guidelines provided by the Texas Department of Labor to avoid this problem. For independent contractors, be sure to have a written contract spelling out the terms of the duties, price, and timing. To the extent the hires are employees, it is critical to spell out the terms of employment in an employee manual and potentially an employment agreement which could include non-compete and confidentiality provisions.
4. Litigation
Finally and most importantly, young companies must do all they can to avoid business litigation. It is invaluable to have an attorney from the beginning who understands your business and assists in protecting it; this attorney should be involved in all your agreements. Businesses avoid this because of the perceived cost of the attorney’s fees, but I implore you to get a quote. The cost upfront is truly minute compared to the crippling cost of litigation. It is great to have an aggressive litigation attorney that can protect your interests in Court, but much more beneficial to have an attorney that helps prevent your business from ever reaching litigation. Litigation is a last resort and can be avoided most times. The clients that use an attorney for prevention purposes usually have long-lasting relationships that create a win for both the business and the attorney.
It may seem easier and cheaper as a new business to not consult a business attorney, however, this is a proven necessary expense that will pay off indefinitely.
Forming a Business in Frisco? Contact Albin Oldner Law Today!
If you are in the process of establishing a business in Frisco or the surrounding areas, the team at Albin Oldner Law is here to help you get it right the first time. Contact our office today at 214-423-5100 to speak to an experienced business law attorney, or complete our contact form.
