5 Tips to Keep Your Online Startup Legal


Do you want to be your own boss? Have you been thinking of starting your own online business? If yes, you are not alone. Over 543,000 new businesses get started each month in the U.S., according to Forbes. Still, being your own boss demands more than hatching an idea, quitting your tedious job, and sitting behind a computer.

To set yourself up for success, every detail needs to be worked out right. You need to have an excellent plan, good focus, the right tools, and information. Unfortunately, most people get everything right but forget to protect their new business legally. Here’s how to legally start your business.

Familiarize Yourself With the Laws

Before taking your business online, it’s important to familiarize yourself with the laws concerning your type of venture. This is critical because different states have different laws, and you should know which ones apply to you. Understanding them will help you steer clear of legal pitfalls or getting entangled in complex legal issues down the road.

If you are wondering how to start an online business legally, start by partnering with a legal expert who specializes in online entrepreneurs. These professionals will guide you through the current laws, help you understand the specifics of online business laws, set-up your business legally, and update you when changes to the law are made. 

Pick the Right Business Name

You may have already thought out a superb business name even before launching your startup. But before you commence printing that name on your business cards, make sure you’re legally permitted to use it. 

To verify if your new business name isn’t infringing on the rights of another business, seek the services of a reliable online company that offers name searches. Such a provider will check whether there is a similar name registered with your Secretary of State’s Office. Make sure to check on the local, county, state, and national level. 

Register Your Business

Every business needs a legal structure. There are several legal structures you can use, and they all depend on your preferences, circumstances, and goals. First, conduct a thorough search to figure out what best suits you, and keep in mind that each state has its own set of requirements. Forming an LLC is preferred by most startups, as it provides maximum legal protection, has the least paperwork work, and has a tax advantage. You can also opt for an S-Corporation or C-Corporation. 

Get a Federal Tax ID

Before setting up your business, it’s essential that you educate yourself about your tax obligations. Once you are fully informed, get a tax ID, also called an Employer Identification Number which is issued by the IRS, and used by them to track your transactions. Having a Tax ID makes your business to look more professional, and you won’t have to use your personal social security number for business matters.

Get Permits or Licenses

Depending on the nature of your online business, you may be required to get a permit or license, according to Inc. The permits and licenses will depend on the local, state, or federal laws that are in place. If you want to sell food or drinks, you’ll need health department permits. For personal services, you’re required to have occupational or professional licenses.

Final Thoughts

It’s an exciting opportunity to start your own online venture. After creating a business plan, turn your focus to the legal requirements. To ensure your startup takes off on the right side of the law, educate yourself on the necessary legal requirements, and seek the help of an expert to walk you through the complex legal processes.

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