Starting a business is an exciting venture, but it’s also one that requires careful planning and legal groundwork. It is crucial to have the right legal documents in place from the outset. What should you address when starting your new company?
1. Business formation documents
Depending on the business structure you choose, you’ll need to file specific documents with your state or local government. These may include:
- Articles of Incorporation for a corporation
- Articles of Organization for an LLC
- Partnership Agreement for a partnership
- DBA (Doing Business As) registration for sole proprietors operating under a trade name
These documents formally establish your company and lay the groundwork for its operations.
2. Operating agreement or bylaws
For LLCs, an operating agreement outlines the ownership structure and operating procedures. For corporations, bylaws serve a similar purpose. These documents govern internal operations and include details about meetings, voting rights, and the roles of directors and officers.
3. Shareholder agreement
If your business has multiple shareholders, a shareholder agreement can set out the rights and obligations of each shareholder, outline how shares can be transferred, and describe how decisions are made.
4. An employer identification number (EIN) and tax registration
Establishing a business also means preparing for the taxes you will need to pay. Depending on your location and the nature of your business, you may need to register for various state and local taxes, including sales tax, payroll tax, and unemployment insurance tax.
In many cases, you will also need an EIN issued by the IRS. This number is similar to a Social Security number for your business and is required to open a business bank account and hire employees.
5. Permits and licenses
Most businesses require some form of permit or license to operate legally. While some states like Wisconsin do not require your business to have a business license, you may still need a business license if you operate in a city that requires one or if you do business in another state. Depending on the products or services your business offers, you may also need documents like occupational licensing, a health department permit or a liquor license.
6. A non-disclosure agreement (NDA)
An NDA protects your proprietary information. When discussing your business with potential partners, investors, or employees, an NDA ensures that confidential information stays private.
While these documents can lay the groundwork for your business’s operations, you may need others to achieve your company’s specific goals. Seeking personalized guidance can help you identify the documents you need to protect your bottom line and support your future growth.