Avoid the Legal Pitfalls of Operating a Business
Most businesses are too focused on day-to-day operations to consider the legal pitfalls they might encounter along the way.
With ongoing changes in the socio-political landscape as well as the influence of rapidly evolving technology, most businesses are too focused on day-to-day operations to consider the legal pitfalls they might encounter along the way.
“These can manifest in a million different scenarios, from employment law issues to federal, state and local tax and revenue issues,” said Bethani Oppenheimer, an associate at Greenberg Traurig, ranked 13th last year among the Atlanta Business Chronicle’s top 50 law firms in the city.
We asked Oppenheimer, who specializes in banking and finance, to answer a few key questions about legal issues facing businesses today.
AJT: What are some basic legal issues business owners manage when operating a business?
Oppenheimer: All business owners need to understand the importance of choosing the right corporate structure from the beginning. It is almost always easier and less expensive to spend the time up front working with your accountants and attorneys through the short- and long-term plans for your business and deciding on a structure that best serves those plans. Additionally, almost all businesses are subject to some sort of licensing or permitting, even if it’s just a municipal business license. Other businesses are subject to state and federal regulations controlling their operations as well.
AJT: What are some legal questions entrepreneurs should consider when starting a business?
Oppenheimer: Are all of your employees properly classified as hourly or salaried? Have you been timely collecting, withholding, reporting, and paying all applicable taxes? Are you doing business under a name that is different than the legal name under which your business is registered? Are you doing business in a different state than the state in which your business is registered or qualified? Are you properly protecting your customers’ data by maintaining compliance with all data and privacy laws applicable to your business? All of these questions are vitally important to the success and longevity of your business.
AJT: What are the legal steps for starting a business?
Oppenheimer:
• You’re going to need a name and you’ll want to make sure that you’re legally permitted to use that name without infringing on the rights of another person. Your attorney can help you reserve or register that name with the applicable filing office in the state in which you want to form your business, perform a nationwide trademark search to see what other businesses are using the same or similar names, and ultimately file your name for trademark protection.
• After you’ve picked a name for your business, you will need to incorporate or organize your business. Your attorney, in consultation with your accountants and other tax planning advisors, can help you choose the state in which to organize and what kind of corporate structure would best serve you and any other equity holders in the new business by advising you on the tax and other legal considerations involved.
• The next thing that you’ll need is a federal tax identification number, state tax and employer identification numbers, and one or more business licenses and permits, depending on the nature of your business and where it will be located. If you’re going to have a physical location, your attorney can help you negotiate a lease.
• You should open a separate bank account under your business name to ensure that your business credit is separate from your personal credit. You’ll also want the advice and counsel of an attorney to ensure that you remain compliant with applicable state and local laws that are specific to your business and those that apply to all or most businesses, such as federal and state employment laws.
Whether starting a company or successfully operating an existing one, Oppenheimer advises: “Don’t be afraid to ask questions about areas of the law and your business that you do not understand. In most industries, there are numerous industry-specific publications that frequently send materials and updates highlighting developments in laws that affect your industry.”
Greenberg Traurig represents businesses in such matters as mergers and acquisitions, commercial loan transactions, real estate, technology, intellectual property, litigation, and employment. The firm is very involved in the Atlanta Jewish community.
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