America is indeed the “land of opportunity” and that is evident in the number of new businesses that start each year. In fact, there were more than 4 million new business applications filed in 2020. Yet, with that measure of confidence and enthusiasm, each new startup owner faces challenges. So, it is important to avoid mistakes to have a better chance for success.
What Are Some of the Challenges That Are Faced by Startup Owners?
Each startup owner can face many challenges including in the early stages, getting investors, properly valuing the business, and raising adequate capital to fund the business. As the business gets underway, challenges include securing team members with the right talent to propel the business, achieving good operational execution, generating adequate cash flow, and acquiring and retaining customers. Along the way, it is important to have realistic expectations.
Legal Mistakes to Avoid as a Startup Owner
To achieve success, each startup owner should use these tips to avoid legal mistakes:
Seek competent legal counsel which can be critical across the board in protecting your enterprise from legal mistakes.
If you start a business with partners, make sure that all the details of your business relationship are understood and documented. That includes roles and responsibilities of the partners, infusion of funds and assets, compensation, profit sharing, and more.
Choose the right legal entity to form the business. This has significant tax and liability consequences.
Select a company name and domain that are protectable and free of trademark problems.
Carefully determine which registrations, licenses, and permits your business will need.
Comply with all securities laws when issuing stock.
Carefully consider the tax compliance consequences of all business decisions.
Keep proper corporate and human resources documentation.
Develop good business contracts and employment agreements, including confidentiality statements.
Seek Expert Funding Assistance
Contact Rushview Commercial Funding based in Pinckney, MI for a staggering variety of commercial finance options for your financing and business needs. We have a great reputation for small business lending.