Legal Hurdles to Keep in Mind When Running a Business

By Guest Author | legal | March 11, 2021

There’s no doubt about it, starting a business is exciting! However, one of the important steps that many new business owners forget to take is protecting their business and personal assets from a legal standpoint. This includes proper business permits, registering your business name, and more. Don’t let the excitement of offering your products and services to new customers cause you to overlook these essential considerations!


Before you open your doors, here are some legal questions you’ll have to ask yourself to make sure you’re fully covered and ready to focus all of your time and energy on helping your clients.

Can You Use That Name?

There are a lot of trademarks and registered companies across the U.S., and when you start your business, you have to make sure you’re not infringing on their existing assets. That includes the name of the company as well as the titles for your products and services.

To cover your bases, do initial research to see if your name is already being used. Determine if your company is different enough to avoid confusion. Shift your name if necessary. You’ll need to do the same with your company logo and other symbols. Once you’ve cleared the name, register your company name with the U.S. Patent and Trademark Office. That will ensure it stays yours and yours alone.

What Licenses Do You Need?

Once you’ve registered your business name, you need to think about what other regulations local, state, and federal governments have regarding your business.

For instance, restaurants need food permits and inspections before they can open. A construction or cleaning business may need specific insurance and licenses. Even online companies have requirements in some states. Do some research to ensure that you have your federal, state, and local requirements covered before you start doing business.

How to Protect Your Personal Assets

Hopefully, everything goes well with your business, and you never face a lawsuit. However, if you do, it’s vital to have your personal savings and assets — including your home — safe from any judgments.

To do so, you’ll need to set up a specific business entity, such as a limited liability company (LLC). This structure limits the personal liability you have if something goes wrong with your business. A customer who sues you won’t be able to access your personal bank account or other assets, for example.

Each state has different requirements when it comes to forming an LLC, but you can get information from your Secretary of State website. Some companies will offer to help you create your LLC for a fee, but first, make sure you actually need help. The process may be straightforward.

How Can You Legally Use Technology?

In today’s society, technology is available to track and understand a customer’s every move. However, not all of that technology is legal or ethical. Knowing what technology you can use and how to do so correctly can make or break your business.

For example, as you track customers online using cookies, make sure you supply the necessary notices and give them an option to opt-out. It’s also important to follow all required privacy laws.

In your daily operations, security devices can be helpful and prevent both employee and external theft. That said, you have to use these devices in a way that’s necessary for your business and doesn’t violate the privacy of your employees.

You can also use electronic signatures for documents, which helps keep them secure in the cloud instead of requiring paper copies. Electronic signatures can help streamline new contracts and bring in new suppliers or employees.

You may also consider the use of dash cams for your delivery drivers to help document the circumstances of any accidents, which can be a significant source of liability for businesses. In fact, transportation incidents are the most frequent type of fatal event on the job, according to the Bureau of Labor Statistics.

Protecting yourself and maximizing your marketing efforts using technology are important steps, but it’s vital to do so legally and ethically.

What Ongoing Legal Risks Do You Face?

Every company faces a variety of risks as they operate, including everything from an economic downturn to a competitor making a major move.

Because of these risks, tracking your ongoing legal risks and making informed decisions based on your data is an integral part of keeping your company growing safely over time. Specialized processes like data mining can help you respond correctly to any crisis so you can rebound and land on your feet.

Make sure you also have protection in place for your employees if something should go wrong, including worker’s compensation and other benefits. Your work environment should also be safe — in office and remotely — with appropriate safety equipment, training, and signage. When you take steps to monitor and minimize your ongoing legal risks, you’ll be in great shape as your company grows.

You Can’t Overlook Legal Risks

Addressing the legal risks associated with any business — from starting an online store to building a tech empire — is a vital part of success. Research your company name, logo, and the titles of your products and services to ensure you aren’t violating an existing trademark. Also, protect your personal assets using an LLC before you launch.

Once you’re operating, you’ll need to assess and address risks regularly. Technology is a great tool, but there are legal and ethical limits to how you can use it. You can also use data to identify and mitigate sources of legal problems on an ongoing basis.

Starting and running a business isn’t for the faint of heart. However, with the right preparation, you’ll be set up for success.

  • Jori Hamilton is an experienced writer residing in the Northwestern U.S. She covers a wide range of topics but takes a particular interest in covering topics related to business productivity, marketing strategies, and startup efficiency. To learn more about Jori, you can follow her on Twitter: @HamiltonJori