Top 5 Legal Issues to Consider when Setting up A Company

The thought of setting up a company can be exciting. But, as you probably know, there are legal considerations that you have to keep in mind during the process. This way, you will ensure that you start your company right and compliantly. Otherwise, you risk legal fines, a jail sentence, business closure or even complex legal tussles down the line. That being said, educating yourself on the legal aspect of setting up a company makes you aware of what is required and sets you up for a successful start. Here are 5 most important legal issues to satisfy when starting a company.

1.  Business name & company structure

Choosing a business name for your company is essentially the first legal aspect to consider. Your services or products will be associated with this name. Ensure that you come up with a name that is catchy and original. However, before you launch and start advertising and publicizing your operations, ensure that you are not violating trademark law. Conduct a name search to ensure that no other company operates in that name. If the name is in use, register it as a trademark to prevent other companies from registering the same name.

In addition to a business name, you need to consider the legal structure of your company. You can choose to register your company as a sole proprietorship, limited partnership, corporation, S-corporation or Limited Liability Company. (LLC). However, you should keep in mind that the business structure will determine the liability issues and tax structure of your business. Be sure to opt for the structure that benefits you most.

After choosing a name and structure, registering your company online is simple with the help of a company formation services provider. You only need to provide vital information about your business and leave the rest to the experts. A reliable platform should handle the name search, do all the filing and necessary legwork to ensure that your company is officially incorporated.

2.  Licenses & permits

Licenses and permits are essential documents that you need to have before opening the doors to your company. At the very least, you will need to apply for a business license and a trading license. Other additional permits will depend on the type of business that you intend to run. For instance, if you are opening a food related company, you will need to register with the food standards and safety oversight body in your locality. The best way to know which licenses and permits that you will need for your business is to do some research and consult the relevant government agencies.

3.  Insurance

Most states require businesses with more than 5 employees to insure their workers against injury at work. You might not be required to get insurance when starting, but you need to keep in mind that as you grow you will be required to get worker’s compensation insurance. In addition, consider getting general liability insurance for your business. It may not be a requirement, but having one in place will come in handy in case you get sued by a customer who gets injured while in your business premises or gets harmed by any of your products.

4.  Taxes

The last thing that you want for your new company is to mess with the Internal Revenue Service (IRS). That is why it is important to sort out the tax issue before you launch your company. It is vital that you apply for an Employer Identification Number (EIN). This is a nine-digit number that is a unique identifier for your business. It allows the IRS to differentiate your business from others when reporting your taxes.

5.  Zoning

When looking for a good location for your business, it is important to first make sure that your area of choice is zoned for your type of business. The rule of the thumb is to never assume just because other businesses like yours are operating in the area. For all you know, these businesses might have been given exemptions that probably don’t apply to new establishments, maybe after a recent change to the laws. Make it a point to seek advice from local government agencies to be sure.

6. Translation Services

When you are setting up a new company, you are going to be dealing with a lot of paperwork. There will be many contracts involved and you want to make sure that you have all of that set up in the beginning so it does not become an issue later. You should consider human translation services. They can precisely decide what the right context for a text is. Words change meaning depending on the context, and the choice of a translation will rely heavily on the context. Therefore you will feel safe and confident about everything you put on paper.


If there is something that you must get right when opening a company, it is the legal aspect. Get it wrong and you risk legal problems after you have launched. Moreover, legal issues become more complicated as time goes by. If you are to get it right the first time, ensure that you cover the above issues. It is also in your best interest to involve a legal expert in the process.

About RJ Frometa

Head Honcho, Editor in Chief and writer here on VENTS. I don't like walking on the beach, but I love playing the guitar and geeking out about music. I am also a movie maniac and 6 hours sleeper.

Check Also

Fast track endorsement requirements for a Global talent visa

The applicant for a fast track endorsement for a Global talent visa must prove that …