Legal Hiccups That Could Destroy Your Business

Seen as you’ve made it here, you’ve probably read countless articles on the things that are necessary for a start-up’s success. For the most part, you’ve probably heard a lot of things like “perseverance”, “courage” and “creativity”. While these traits are certainly helpful, they’re nowhere near as important as some of the more boring things you need as a business owner. A firm grip on various legal challenges is one of them. Here are some of the most common legal hiccups which you need to be aware of.


The first legal pitfall every new business owner should be aware of is choosing the wrong corporate identity. I told you these issues weren’t going to be the most exciting things in the world! Although it’s very mundane, choosing the right corporate identity for your business is one of the most important moves you’ll have to make right at the start of your venture. Choosing to run it as an LLC, LC, C Corp or any other corporate identity will all depend on your long-term vision for the business. Think about LLCs for a moment. This is a pretty good model to follow in the short-term. In the long term, on the other hand, the structure of it will make it much harder to raise capital and grow. Be aware of how different legal entities will give you different opportunities and limitations. Changing your structure is often more hassle than it’s worth, too.

 nyc-irs-officeCredit: Wikimedia

Business owners run into another serious problem when they fail to remit sales or payroll taxes to the right agencies. The law states that all businesses have to collect taxes on their sales and payrolls, and then remit them to the appropriate government agencies. There have been countless times where failing to keep up with this responsibility has marked the end of some very promising businesses. I’ll take a guess here and say that this is something you don’t want to happen! Set up a separate bank account specifically for the collection of sales taxes, and sign up to a payroll service that will let you remit taxes automatically. If you run into any serious blunders, contact a tax attorney as soon as possible.

uspto-logoCredit: Wikimedia

Finally, make sure you don’t have any trouble with copyright and patent issues. We’re in the tail end of 2016 now, and technology continues to race ahead. If your start-up has something to do with some young, developing technology, then you may be running the risk of some fierce patent litigation. Like failing to remit your taxes, this kind of pitfall can totally bankrupt a business in the wrong kind of circumstances. You wouldn’t believe how many businesses acquire patents, and simply wait for another entity to violate them so they can cash in on the litigation. When you’re developing a new product, make sure that the guys in your R&D are researching any patent and copyright issues that may come up.

As you launch into the exciting world of business, be aware of these issues and avoid them like the plague!

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About Dequiana Jackson

Dequiana Jackson, Founder of Inspired Marketing, Inc., helps overachieving women entrepreneurs conquer limiting beliefs and create marketing plans that grow their businesses. This includes one-on-one marketing plan development, digital product creation, web design and content marketing. Dequiana is the author of Know Your Business: How to Attract Ideal Clients & Sell More and runs the award-winning blog,

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