Compliance Checklist for Creating and Operating Your Business

By Jason M. Gray, Esq.

One of the difficulties in running a business is figuring out which types of laws and regulations apply. Figuring out the intricacies of federal and state law is difficult enough. Then, depending on where your business is located, you also need to consider local ordinances and regulations such as the county or city code. This complexity can sometimes lead to a bury your head in the sand approach where it is hoped that ignorance of the law will be a defense if something goes wrong. However, that is not the case. It is assumed that business owners are aware of and understand the laws that are applicable to their businesses.

In order to begin the process of ensuring compliance with the law, there are several steps that can be taken in order to protect your business. First, it is critical that you select the appropriate corporate structure for your business to reduce potential personal liability as much as possible. Second, choose a name for your business that will avoid any unnecessary intellectual property disputes over things like trademarks. An attorney with experience in this area of the law will be able to help you search for a name that you can protect under the law. Third, prepare an operating agreement and file all necessary business entity formation paperwork with the appropriate state agency.  Fourth, obtain Federal Employer Identification Number if you will have any employees or if other statutory factors apply to you.

During the process of forming a business, another important consideration is figuring out if the services or products you provide are regulated by federal law. If so, a federal permit could be necessary. There are also many different types of state permits or licenses that may be required depending on the type of business conducted. You do not want to get off on the wrong foot with a regulatory agency in your industry by being sanctioned with fines or other penalties for failing to register your business.

You may also need a sales tax permit and a business license from the city or county where you conduct your business. If you sell products or provide services in multiple jurisdictions, including online sales, the law from each jurisdiction could apply to certain aspects of your business. For example, the United States Supreme Court recently issued an opinion that alters how and when states can require out of state online retailers to collect sales tax on behalf of the state where the customer is located. The states are still determining how this change in the law regarding online sales tax will be implemented, but awareness of the change can help you avoid potential legal issues later on.

Other considerations that are vital to the success of your business will be familiarizing yourself with the requirements of federal and state labor laws, and hiring a skilled accountant that can guide you through payroll and tax season. Committing yourself to gaining as much knowledge about the laws related to your business is a start, but an attorney with experience providing advice to businesses similar to yours can lead you to a better understanding of how to protect everything you have worked so hard to accomplish.

If you have questions about any of these issues, please talk to an experienced attorney about them. Some law firms, like mine, will even offer a free initial consultation on most business law matters. Nothing should prevent you from getting the information you need to establish or build your business the right way. 

This has been presented as general information and not as legal advice. Do not engage in legal decision-making without the advice of a competent attorney after discussion of your specific circumstances.