By: Brian Holm
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According to the U.S. Small Business Administration, the majority of entrepreneurs who launch a business will fold within 18 months. Why? While there are a number of reasons, the overarching theme is a poor business plan. When you are starting a business in San Diego, it is imperative to organize your company correctly from the start. Here are several preliminary legal issues you should consider before opening your doors:
1. Your Legal Identity
One of the first things any business owner should do is determine which business entity to establish. The state and federal government will levy a variety of taxes based on your formation, which can be any of the following:
- Sole proprietorship
- S Corporation
- Limited Liability company (LLC)
Each business entity type has its advantages and disadvantages, so it is important to carefully consider these factors before selecting one.
2. Register Your Business Name
Naming your business can be a fun experiment in creativity, but it also has legal implications. If you have a sole proprietorship or a partnership, you need to register a name – also known as a “doing business as” – in order to conduct operations under a title other than your name or your partner’s name. Owners of corporations and LLCs can also rename their organizations through this process. In California, you can simply contact the county clerk to fill out the necessary forms.
3. Get a Tax Identification Number
In addition to your name, it is imperative to get an employer identification number, which is also known as a federal tax identification number. This is how the government will identify your business and issue the appropriate taxes.
After registering with the federal government, you will also need to determine what your state and local tax obligations are. The most common forms of these taxes are income and employment taxes. In California, businesses are also required to pay for temporary disability insurance.
4. Protect Your Intellectual Property
Another item you should check off your list before launching your business is to ensure that your intellectual property is protected. This is often accomplished through trademarks, copyrights or patents. By putting these in place over your business name, logo or products, you are taking the right legal measures to prevent theft or other unfair business practices.
The business attorneys at Holm Law Group offer comprehensive legal assistance to help owners launch their companies. Through starting a business in San Diego the right way, you are positioning your company for success. To learn more about our services or to get started today, please call us for a free consultation at (858) 707-5858.