Entrepreneurship is more than a challenge if you look at the legal grounds involved in it. A successful entrepreneur is someone who has started running his/her new business venture in a legally and ethically fair manner. Starting from structuring the business idea to getting the entrepreneurship license, product selling, taxation, employee management, every little nook and corner of an entrepreneurial venture is wrapped in legal procedures.
If an entrepreneur wishes to run his/her startup seamlessly without getting into legal hurdles in the long run, then he/she must be aware of certain areas of law. This article will focus on 10 such prominent legal areas for the entrepreneur. Watch out.
Why do entrepreneurs need to know legal aspects?
Any entrepreneurial venture is incomplete without its legal grounds. In order to run the startup without legal hassles, every entrepreneur should have a basic knowledge about the areas of law for the business person. Let’s understand why it is necessary for an entrepreneur to know the legal aspects of a startup.
- Understanding legal aspects helps the startup run smoothly without future legal hurdles.
- Knowing the laws helps meet the financial challenges easily for an entrepreneur.
- If an entrepreneur has a basic understanding of the state and federal laws, it will help him/her handle trade license and taxation procedures.
- Certainly, entrepreneurs need to hire professional lawyers to handle the legal aspects, but when it comes to decision making, lawyers can’t help much.
- To expand the startup further, an entrepreneur needs to know the financial and foreign policies of a federal government.
- To ward off vested interests that are quite common in the business fraternity, an entrepreneur must know the twists and turns of legal grounds.
10 areas of law for entrepreneur
There is a host of laws that an entrepreneur must comply with if he/she wants to grow his/her startup the right way. Among loads of paperwork, agreements, tax filing, employment procedures, entrepreneurs need to get through several areas of law. However, the following are the 10 prominent areas of law for an entrepreneur.
1. License laws for startup
For a startup to go up and running, the primary requirement for the entrepreneur is to get a trade license. During the initial processing, applying for a startup license requires an understanding of state and federal laws. However, depending upon the type of startup, state laws for license agreements differ from place to place. For a better understanding of the state codes and zonal norms to get business licenses, entrepreneurs can refer to what is the United States Code.
2. Company formation regulations for startup
Company formation rules will strike even before the inception of the entrepreneurial venture. New business owners must understand the nuances of this part and fairly analyze what kind of startups they target to form. Based on the legal entity of the business, the entrepreneur needs to register the startup company as one of the following types.
- Limited liability partnership
- Family startup
- Third-party private limited
- Public company
For further knowledge on company formation and partnership, new business owners can look at the official website of the Legal Information Institute.
3. Entrepreneurial funding and financing laws
Finding and financing a startup is perhaps one of the most crucial stages of constructing a business from scratch. In most places, there are fair government policies regarding small business loans that help the new business planners with less initial capital. Entrepreneurs need to apply for these loan programs with an associated moneylender.
There are some other financing options that federal governments provide to the new entrepreneurs.
- Small Business Innovation Research Program
- Small Business Technology Transfer Program
- Small Business Investment Company program
For more clarity on entrepreneurial funding and financing, new business owners can refer to the official website of the US State Government and go to their Small Business section.
4. Taxation of the startup
One of the essential checkpoints that new business owners have to consider right at the beginning is taxation. Entrepreneurs have to pay attention to the location-based tax filing norms to stay ahead of the future legal hassles. Following are the types of taxes an entrepreneur might require to pay.
- Sales tax
- State and federal taxes
- Income tax
- Employment tax
5. Employment and labor laws for entrepreneurs
A new business must have a set of employed workers to take care of the many aspects of the startup seamlessly. The federal government has set employment norms and labor laws to protect the rights of the workers at the workplace. These laws determine aspects like daily wages, bonuses, gratuity, overtime rules, provident funds, labor compensation laws, and many more.
To have a fair amount of knowledge on labor laws, entrepreneurs can refer to the official website of the US Department of Labor.
6. Entrepreneurial privacy laws
Any new entrepreneurial venture requires privacy policies to secure the transactions between customers and workers. Data Protection is one such essential part of new businesses, and to secure this part, government authorities have structured Privacy laws. Through these norms, entrepreneurs ensure consumer data security.
7. Intellectual property laws for startup
Intellectual property for a startup is another crucial part that the new business owner must focus on. Intellectual property laws are thus, here to protect the unique branding aspects of a startup, like copyright, business logo, business startup domain names, trademarks, etc. For a better understanding of such laws, entrepreneurs can refer to the US Department of State.
8. Sales and marketing laws for entrepreneurs
Sales and marketing laws simply focus on the authenticity of the products that a startup aims to sell to the customers. The norms suggest that entrepreneurs must advertise the right products without misleading the audience, and the products must stand up to their claims.
9. Entrepreneurial healthcare policies
In such trying times when the world is witnessing the most brutal pandemic of the decade, federal structures have set new norms and healthcare policies that every sector has to comply with. Hence, entrepreneurs should know the new and updated healthcare laws to ensure employee safety in terms of health.
10.Onsite safety for startup
Onsite safety of the workers is yet another crucial part of a startup that might make or break the brand image. There are federal rules on workplace safety for the workers. These norms condemn racial and gender discrimination across the workforces along with discrimination based on caste, religion, or other socially controversial grounds.