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Launching a Startup During the Pandemic? Here’s How to Legally Protect Your Business

It’s no surprise that the pandemic has compelled people to start a small business. In fact, there has been an increase in new business applications in the U.S. This could be attributed to the number of people who lost their jobs during the pandemic.

But while promoting your business is one thing, keeping up with the legalities is another. Unfortunately, the latter isn’t exciting for a business owner with a fledgling business. But it is your responsibility to ensure the legitimacy of your small business.

If you’re launching a startup amid a pandemic, here’s how to legally protect your small business:

1. Business Registration and Licensing

Business registration and licensing vary from one state to another and from one industry to another. That’s why it’s important to ask your local authority what the legal requirements are. For the most part, you’ll kick off your business by identifying your business structure:

  • Sole Proprietorship: This business type is when you are the sole owner having complete control of your business.
  • Partnership: This business structure is when you partner with two or more people to own and run a business.
  • LLC/Corporation: This business type may not be appropriate to your plan of running a small business. For your reference, an LLC and a corporation both have a group of business owners. But while LLC members have an equity interest in the business, corporation owners have shares of stocks in the company.

Once you’ve identified your business structure, you can register your business names:

  • Entity Name: This protects your business at a state level.
  • Trademark: This protects your business at a federal level.
  • Domain Name: This gives you the right to claim your business’ web address.

At this point, you can get the necessary business permits and licenses to make your small business legal and legitimate.


2. Legal Duties in Selling Goods or Services

When running a small business, you may be selling some goods or offering certain services. It’s important to get acquainted with the consumer laws on the sales of products or services. Here are some things you must keep in mind:

  • Setting standard contracts with fair terms and agreements
  • Providing consumer guarantee
  • Ensuring product safety or service quality
  • Ensuring sales practice compliance
  • Complying with tax obligations

3. Legal Scope for Leasing Property

If you don’t own a commercial property, you’ll most likely rent out a space for your small business. That is where a lease comes in.

lease is a contract that shows the terms and agreements when you rent a property. As a tenant, you use the property and pay the owner for a specified period. As lease is a form of incorporeal right, it protects both parties. This means that both the lessee and lessor will face legal consequences if they fail to comply with the contract.

That said, be sure to read and understand the contract before signing it.

4. Legal Contracts for Employees

When running a small business, you may have a handful of employees working for you. Know that your employees are your best business assets. For this reason, you must legally protect them and ensure their overall welfare as well. Below are some business practices you must ensure:

  • Fair salary/wage
  • Just benefits and compensation
  • Leave entitlements
  • Tax compliance
  • Employee records
  • Equal opportunities
  • Safe employment conditions
  • Injury management

5. Insurance for Business Protection

Insurance is vital in any given business, be it a small-scale or a big-time company. It is meant to protect you and your business financially and legally.

There are a few types of insurance you may want to get for your small business. Here are some of these:

  • General liability insurance: This protects your small business from various forms of financial loss such as property damage and personal injury.
  • Product liability insurance: This protects your business when selling certain products if one of your products becomes defective.
  • Commercial property insurance: This protects your business property from financial loss and property damage due to natural disasters or accidents.
  • Other insurance types: There are other types of insurance specific to the type of small business you have. For instance, have worker’s compensation in place if you run a construction business with contractors working in dangerous sites. Also, consider an insurance underwriting service for your gun store to ensure that you get the right policy based on the risks involved in your firearm business.

When running a small business, it’s important to stay on top of your legal requirements. Consider the legalities of business registration and licensing, sales of goods or services, property lease, employee contracts, and insurance. With all these in place, you’ll legally protect your business and avoid any legal ramifications in the long run.

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