Last Updated on Apr 21, 2022 by James W

You may be on the verge of adding your own startup to the more than 32 million small businesses representing 99.9% of all firms in the United States. The excitement of starting your own business with the expectation of watching it grow and prosper can quickly turn into disappointment and failure if you overlook the need to make your business legally compliant.

Until a business begins generating an income, entrepreneurs launching new startups must make difficult decisions about how to allocate their limited capital. Trying to save money by delaying the hiring of a business law attorney until their business is up and running is a common mistake made by startup owners that may prove fatal to a new venture.

To help you make wise choices for your newly started business, here are a few legal tips to keep it and you on the right side of the law.

Consult a business law attorney early in the startup process

Something as basic as choosing a name for a business has the potential to create serious legal consequences that may prove to be quite costly to resolve. A name, logo or slogan that infringes on one already in use by another company may trigger lawsuits and claims of trademark or copyright infringement that can be difficult and costly to defend.

Consulting an attorney whose practice focuses on business law early in the startup process may avoid violating the legal rights of other businesses. For instance, a search conducted by your attorney can reveal whether the name of your startup violates a competitor’s trademark or violates state or local laws restricting the use of certain words, such as “bank” or “insurance.”

Choose the right business structure 

You have choices about the structure of your business, including:

  • Sole proprietorship
  • Partnership
  • Corporation
  • Limited liability company 

Each type of business structure offers differences in the degree of protection afforded owners of the business and may provide tax advantages. A sole proprietorship is the easiest and least expensive to set up, but it provides little protection to an owner against personal liability in the event of a claim against the business. A lawyer can suggest the right one for the business and set it up for you.

Compliance with government regulations and licensing

Whether you hire employees or rely on independent contractors to run your business, you need to comply with government regulations regarding hiring and termination practices, taxation, benefit programs, and workplace safety. Violating the law may subject a business to fines and other forms of enforcement action by government agencies.

Rely on written contracts

A phone call to a supplier to order raw materials can be as legally binding and enforceable as a written contract, but verbal agreements can be difficult to prove in court. Written contracts prevent disputes and misunderstandings with employees, co-owners of the business, vendors, and customers.

Frequently used contracts can be created as a form by your business attorney to make them readily available for use. When disputes arise, a written contract containing the terms of the agreement between the parties helps to quickly resolve them.


When you have so much to do in order to turn an idea into a thriving business, putting each of these legal tips into operation avoids common mistakes experienced by startups. Working with a competent lawyer and accountant can provide you with additional advice to guide you through your new venture.

  • 21/04/2022
Read more
Top Unsuccessful Ways to Finance a Startup

Article writer, life lover, knowledge developer and owner at