Important Legal Requirements for Starting a Small Business
Starting a business is no small feat. It’s very easy to make critical mistakes during this process when one doesn’t know all the proper steps, especially the legal ones. There are a lot of laws and regulations that should be thoroughly followed as they confirm a company’s legitimacy. Not abiding by these requirements is a surefire way to get into legal trouble, like fines or lawsuits. That’s why it’s strongly recommended to hire proper counsel, like specialists from a business law firm in Lithuania as they are well equipped to handle and ensure that you don’t do something illegal. They will guide you through all the steps and requirements one needs to meet when starting a small company.
Designate the proper business entity
Every startup needs a suitable structure as it is crucial when it comes to personal liability, taxes, and even fundraising abilities. It can include a general and limited partnership, sole proprietorship, or limited liability company. Once this decision is made, it needs to be officially designated through appropriate legal channels.
A lot of small businesses start as partnerships or sole proprietorships because they require the least amount of set up time and paperwork. Others choose corporation or LLC as it is more suited for those that plan to raise venture capital or secure a business loan. If you are unsure what suits you best, consult an attorney.
Check appropriate licenses, permits & registrations
Depending on the type of company you want to run, you might need specific business licenses and permits. These come in many variations but hired help from a business law firm in Lithuania or neighboring countries will assist in getting the right ones.
There is a variety of licenses, permits, and registrations. They can be:
- Local business,
- Health safety-related,
- Home-based business,
- Industry-related, and many more.
With the help of lawyers, do thorough research on things you need to be compliant with, depending on your country and area.
Make sure you are paying proper business taxes
Everyone is legally required to pay their taxes and companies are no different. It includes such things as income, self-employment, and for some, sales tax. It’s recommended to hire a tax advisor or an accountant and get some additional help from a business law firm in Lithuania. They will aid you when it’s time to find appropriate forms and instruct on how to fill them out.
Do proper bookkeeping
In most places, companies have to record every business transaction as it is required by law. Depending on the country that you operate in, financial statements must include different things. This could be balance sheets, profit and loss accounts, cash flow statements and more.
Check what’s mandatory in your industry in terms of record-keeping obligations. Set up an appropriate bookkeeping and filing system for all company transactions and documents. This will greatly help when doing taxes.
Purchase workers compensation insurance
Compensation laws vary from country to country, but they generally fall into two categories: Bismarckian and Beveridgean. The former system is based on employer contribution to the insurance program and the latter is financed through taxes. With the aid of legal specialists from a business law firm in Lithuania or another country, find out which applies to you based on the region you operate in.
This covers medical and legal costs associated with work-related employee illnesses and injuries. This coverage should begin from the very first day they start working for you.
This legal statement specifies what a business does will all the sensitive data collected from customers, how it’s processed and for what reason. Every startup should have a proper policy as any violation of privacy laws can lead to criminal liability. Refer to a business law firm in Lithuania and they will help to plan out and establish an appropriate one for your company.
If you’re thorough and adhere to all the legal requirements while starting up a business, you’ll save yourself from possible serious troubles in the future. While some of these things can be done individually, it’s strongly advised to consult appropriate legal specialists. They will be of great help when it comes to doing regulation research and drafting company plans.