🔥 The 5 Legal Moves Every Founder Must Make Before Launching a Business скачать в хорошем качестве

🔥 The 5 Legal Moves Every Founder Must Make Before Launching a Business

Starting a business feels like lighting a match: quick spark, big hopes, lots of momentum. The legal side can feel like a wet blanket—until you realize it’s actually the fire ring that keeps everything from spreading into a disaster. Here are the 5 legal moves every founder should make before launching. Not because you want to “lawyer up,” but because you want to protect your personal assets, look credible to banks/customers, and avoid expensive do-overs. Choose the right legal structure (and understand taxes) You’ll hear three opinions fast: “Get an LLC,” “You need an S-Corp,” or “Just stay a sole proprietor.” The truth is: the best structure depends on liability exposure, tax goals, number of owners, growth plans, and industry rules. Also, your state entity and your federal tax treatment are related—but not identical. “S-Corp” is a tax classification, not a state-created entity. Some LLCs elect S-Corp taxation. Others stay pass-through. Choose what fits you—not your neighbor. Do the essential filings and foundation documents Once you pick a structure, do the basics properly: • Formation paperwork with your state • An EIN • Required licenses/permits (state + local) • Tax registrations where applicable (like sales tax) • Governance docs (operating agreement, bylaws, shareholder/partner agreements) Those “boring” documents do real work later—especially with multiple owners. And if you’re tempted to do a 50/50 partnership, plan for deadlocks and exits now. Pair your entity with the right insurance An entity can limit liability, but it doesn’t pay claims. Insurance does. Think in terms of losses you cannot personally absorb: • General liability • Professional liability / E&O • Workers’ comp (often required if you hire) • D&O (as you add leadership/boards) • Cyber insurance (phishing, ransomware, downtime, response costs) A retail shop worries about premises risk. A digital business worries about data and interruptions. Match coverage to your real-world risk. Build clean records that support your protection If you form an LLC and then run everything through your personal bank account, sign contracts personally, and mingle money, you weaken the separation that protects you. Courts call it “veil piercing,” and while it’s the exception, it’s easier to argue when your business looks like an extension of you. Set up separate bank accounts and cards. Use consistent bookkeeping. Save receipts. Organize contracts. Keep key decisions documented. Bonus: clean books become financial statements, which banks, investors, and buyers will want. Build your advisor bench before you’re in trouble You don’t need to pay a lawyer, accountant, banker, and insurance broker every month. But you do want relationships you can call when you need answers fast. Some founders also pick a “quarterback” advisor—someone who can coordinate the others. And don’t overlook informal mentors. People who’ve built businesses can warn you about problems you don’t even know to anticipate. Common mistakes (and quick fixes) • “I formed an LLC, so I’m safe.” Use it properly: sign as the company, keep money separate, follow basic formalities. • “I don’t need insurance yet.” One claim or breach can wipe out months of progress. • “Bookkeeping can wait.” Catch-up bookkeeping is expensive and credibility-killing. • “We’re 50/50 and we’ll agree.” Plan for disagreements, buyouts, and exits. A real-world example Imagine you land your first big client. They send a contract. If you sign it personally (instead of as the company), you may have personally guaranteed performance—entity or not. Or imagine a customer claims your product caused harm. Without general liability coverage, you could be paying defense costs out of pocket. Or picture a ransomware email that locks your laptop and customer files. Cyber coverage can be the difference between a bad week and a closed business. A simple “Day 1” checklist ✅ Confirm structure + tax treatment ✅ Open business accounts/cards and pay business expenses there ✅ Get EIN + required licenses/permits ✅ Put governance terms in writing (owners, voting, exits) ✅ Buy insurance for catastrophic risks ✅ Start bookkeeping immediately and keep contracts organized DIY tools can file forms, but they rarely help you decide what’s appropriate for your risk, taxes, owners, and goals. If DIY is your only budget option, it may be better than nothing—but plan for a professional review early so you don’t pay double later. Schedule a consult at lawwithmiller.com