Small business law includes a wide variety of legal topics, especially upon start up of the company. When the company is formed, there are different considerations the owner must make, such as what kind of entity to form. As the business develops and grows, legal issues with business transactions and employment are also things that must be considered. Additionally, there may be other special considerations depending on the industry in which the business operates.
Upon formation, the biggest consideration with regard to small business law is what kind of entity the business should be. There are many different kinds of business entities, each of which have certain benefits and disadvantages to consider. For instance, corporations typically offer the greatest level of protection to the owners of the company with regard to civil liability because of the “corporate veil” that exists, while limited liability companies offer similar levels of protection with added tax benefits. This is a complex decision with many different precipitating responsibilities such as the drafting of bylaws or an operating agreement.
The small business owner should also be aware of the different tax ramifications that they will face depending on their choice of business entity as well as the jurisdiction in which they form the business. Business tax law is complex no matter the size of the company. It is recommended that any small business owner seek out the advice of a tax professional prior to getting their business off the ground.
There are also other less obvious small business law issues that a business owner must consider. Intellectual property issues, such as trademarking the business name and logo, is something that small business owners often fail to consider even though it is an important aspect of creating their brand identity and protecting their place in the market. Further, if the business deals with vendors, they will need to consider the terms of their contracts, which is a significant part of small business law.
If the company is in certain industries that have extra regulations, then they will be required to make other legal considerations. For instance, opening a business in a highly regulated industry like the sale of alcoholic beverages leads to a whole host of legal issues that would not need to otherwise be considered. Another example of an industry that is highly regulated in a much different way is running a day care, where the safety of children must be considered. No matter the industry, there are going to be unique small business law considerations for each and every owner