How to Protect Your Startup From Legal Trouble

By Matthew King | Business Planning

Sep 10

Starting your own business can be one of the most enjoyable times in a person’s life and is a journey that allows you to express your creativity while being your own boss. However, with such a large dream also comes many legal responsibilities to keep in mind. The following list entails some of the most important things to be proactive at when creating your first start-up business.

Retain an Attorney

You might think that setting up shop is often the easiest part of a new start-up, but data supports that unestablished entrepreneurs will often see legal or regulatory challenges from the more established names in the business. This is why you should always (especially at the beginning) have an attorney on retainer. Having an attorney on retainer essentially means that you pay a small amount of money per month to an attorney in order to have regular legal assistance. Often the best tool of defense during these challenges is an attorney or even a team of attorneys working to help you realize your dream.

Keep Records

Keeping a record of all your documents and transactions is often the law in most states. Thus, one should always make sure to maintain a proper filing system that works best for your area of business. This will also allow you to be prepared for any audits come tax season or if you are ever challenged on a transaction by a client.


There is nothing more important than protecting your business, especially when it comes to defending yourself against libel, slander and copyright infringements. One of the most common and important insurances a business must obtain is liability insurance. Although this won’t keep you out of court, it will no doubt mitigate your exposure once you step into court. According to Lane & Lane, claims for pain and suffering can add up from tens of thousands to even millions of dollars.

Secure Your Business

We live in an age where break-ins are becoming less frequent, and digital data stealing is the new norm. Although we still promote the action of securing your business with proper lighting, padlocks and other physical barriers, the fact of the matter is that you’ll properly spend most of your time on digital security. This can easily be accomplished by investing in the countless top tier security software on the market. This will allow you to protect not only your digital records but also other sensitive data such as customer credit card numbers and past transaction information.

Taxes, Regulation and Licensing

One of the first things that a new business owner will notice is that they’re local, state and federal government will always be watching to make sure that you are up to legal standards regarding every area of your business. This means you must, before anything else, obtain the correct licensing and set up your business to pay the correct amount of taxes for that type of business. Business owners will often overlook these key areas and get themselves into serious legal trouble with the IRS come tax season.

Getting your business off the ground can be one of the most difficult things we can do. However, if you are proactive with your legal planning, then you will no doubt be able to save yourself from many legal headaches in the future. Lastly, always make sure to consult a respected attorney for further advice on your options.

About the Author

Matthew King is the owner of the Startup Forums, Alkries LLC, and co-owner at TR King Insurance Marketing. Partner at Independent Life Insurance Agent Association, Medicare Training 101, and Final Expense 101. When he's not creating content about running successful businesses here. He's most likely developing processes, diving into SEO, or gaming with his friends and wife.

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