Starting A Small Business? 5 Common Legal Mistakes To Avoid

small business

Anyone doubting the importance of small businesses to the American economy has not seen statistics published by the U.S. Small Business Administration. Small businesses represent 99.9% of all firms in this country and account for 62% of net new jobs created since 1995.

It is easy for someone starting a new business to get caught up in the excitement and frenzy of finding a suitable location, raising capital and making contacts with suppliers. What you don’t want to do is lose sight of the legal pitfalls that can derail a startup.

Something as simple and easy to arrange as a consultation with a business law attorney provides a wealth of advice and guidance about the legal environment in which a business must operate and how to successfully navigate through it. A business venture that fails to comply with government regulations regarding employment, taxes and other legal matters may find itself facing substantial fines and other penalties that could destroy it.

To get you and your business started on the right path, here are five of the most common legal mistakes made when starting a small business. Yes, we even include tips to help you to avoid them.

Mistake #1: Not wanting to spend money to hire a lawyer

Waiting until after the business is operating and generating an income before hiring an attorney with experience in business law is not an effective way to save money. It generally costs less in legal fees to hire an attorney early in the formation process and avoid problems than to bring someone in to handle a lawsuit or regulatory compliance violation.

During the startup process, a business attorney can help in several ways, including:

  • Recommending a type of legal structure for the business.
  • Reviewing and negotiating leases and contracts.
  • Conducting trademark and copyright searches to avoid infringing on the rights of another business.
  • Taking steps to protect intellectual property rights of the business.
  • Helping the business comply with federal, state and local government laws requiring licensing for certain types of business operations.
  • Preparing employment contracts and helping the business comply with state and federal employment laws.
  • Preparing partnership and operating agreements for owners of the business.

These and other services provided by an attorney help a business to avoid conflicts and disputes that could lead to lawsuits or government action against the business and/or its owners.

Mistake #2: Choosing the wrong business structure

There are several legal structures from which to choose when setting up a business. The type of business structure determines how the business pays its taxes and whether other parties, such as creditors, with claims against the business may sue its owners and seize their personal assets.

small buisness

A business law attorney can help you choose the best legal structure for the operation of your business. Options include the following:

  • Sole proprietorship: By far the easiest of all business structures to create, the sole proprietorship makes no distinction between an owner and the business. Business income must be reported on the owner’s personal income tax return, and the owner may be held personally liable for debts and financial obligations incurred through operation of the business.
  • Partnership: Two or more people may agree to operate their business as a partnership. Each partner reports a share of the profits and losses of the business on their personal income tax return. Creditors of the business may sue the partners personally and look to their personal assets to satisfy obligations of the business.
  • Corporation: State laws protect the owners of corporations from personal liability for business debts and obligations by recognizing the corporation as a legal entity that may sue and be sued in its own name. The business entity files its own income tax return and pays taxes. Shareholders, who are the owners of the business, pay taxes on dividends they receive from the corporation.
  • Limited liability company: State laws allow an LLC to operate separate and apart from its ownership, which makes it similar to a corporation in protecting the assets of its owners against lawsuits or claims arising from operation of the business. An LLC files its own income tax return and pays taxes on the business income.

When choosing a business structure, keep in mind that it can be changed as the business grows. For example, you may be a one-person operation in the beginning and decide to operate as a sole proprietorship. However, the growth of your business and a desire to add other owners may cause you to change the structure to a partnership, corporation or LLC.

Mistake #3: Failing to obtain tax identification numbers

Unless you operate as a sole proprietorship, you need to apply to the Internal Revenue Service for an Employer Identification Number or EIN. The EIN identifies your business as a taxpayer with the IRS and state taxing authorities in much the same way as a Social Security number does for individuals.

Having an EIN may not mean that your business is fully compliant with state taxing authorities. Whether you have a brick-and-mortar operation or an online store, your business may be obligated to collect sales taxes on goods or services it sells and remit them to the state. If so, your business attorney may determine that you need a certificate and/or sales tax number from the state or states in which you do business.

Mistake #4: Operating without the proper licensing

You filed for and received licenses from your state to legally operate as a business, but certain types of business activities require permits from the federal government. For example, a business that sells alcohol, tobacco or firearms probably requires licenses from their state government, but they also may need licenses from the federal government.

Your attorney can investigate the laws that apply to the activities engaged in by your business to determine the types of licensing required to be in compliance with the law. The scope of the research done by your lawyer will include licensing requirements in all states where your business plans to operate.

Mistake #5: Allowing intellectual property to go unprotected

Intellectual property may be some of the most valuable assets that your company owns, but you could lose them unless steps are taken when starting your business to protect them. Common examples of intellectual property include:

  •         Business or trade name.
  •         Logos.
  •         Domain name and design.
  •         Proprietary software.
  •         Service marks.
  •         Inventions.
  •         Confidential information and commercial secrets.
  •         Product designs.

Filing applications to protect the intellectual property of your business through trademark, copyright, and patent protection is only one step to prevent the loss of valuable assets. Your attorney may recommend that you have key employees sign non-disclosure and confidentiality agreements when they are first hired to work for the business.

Conclusion

Unfortunately, these five mistakes represent only a few of the legal traps that people face when starting a small business. Getting sound professional advice from a lawyer and accountant can help you anticipate the mistakes and avoid them before they create problems.

 

small business coach

The Best Parking Management and Control Systems for Companies

parking management

How does a parking management and control system work?

Long gone are those days when you had to pay some coins to be designated parking space for your vehicle. As the world inches close to complete digitalization, developing parking management software is the need of the hour. It provides the best solutions to problems like the increasing number of vehicles, rapid urbanization, and the growing population.

Parking is one of the essential components of parking that need extra full attention. All vehicles require a specific location where they can be parked. But due to the unavailability of real estate and parking spaces, companies are taking the help of parking administration and control systems for the optimum utilization of parking land.

Parking management refers to the methods and programs used to optimize the usage of parking spaces and resources. As urban areas struggle to allot spaces to vehicles, parking control solutions are in demand. However, maintaining spaces and car parks isn’t easy, and that’s where these methods come into play. 

Key components of a parking management and control system

Many companies are coming up with their parking management software. The varied choices one has in the industry make it complicated to choose one method that provides all solutions. To make it easier to choose, you can look out for the following key components that should be in every parking management and control system:

  1. Track traffic: The software should be able to track inbound and outbound traffic in real—time. It should calculate the spaces that have cleared up and the number of cars that have passed in a specific time. 
  2. Set unique criteria: The parking management and control system should be able to manage different criteria, such as VIP and disabled categories. 
  3. Cover multiple locations: The software will be a hit with vehicle owners if it can manage and cover various areas at once. This could be in the form of car parks in different locations or parking slots in a multi—story car park. In addition, the higher organizational skills the software has, the more people will be compelled to use it. 
  4. Develop reports: The critical feature one must look out for in a parking management and control system is that it should be able to translate data into actionable measures. For example, analytics like improving traffic flow or generating more ROI will help you oversee and gain control over all parking systems. 
  5. Choice in payment options: You cannot expect people to pay for their parking space in a standardized manner. Therefore, your software should give people the freedom to choose a convenient mode of payment. 
  6. Parking permits: Issuing and tracking permits, depending upon the duration and location, influence the parking control system. Visitor passes, staff passes, and other passes should be smoothly issued within this software. 

Seven Benefits of a parking management and control system

An efficient parking management and control system benefits the vehicle owners and spaces owners. Here are the following benefits:

  1. Reduces the expenses of governments, businesses, and consumers
  2. Reduces parking management costs
  3. Improves and facilitates hassle—free parking
  4. Improves the safety and security of vehicles in a proper parking management system
  5. Minimizes traffic congestion and accidents
  6. Saves time as the people find parking spaces within a few seconds using a parking management software
  7. Greater accountability and understanding of how car parks are used and monitored

The advantages of using SaaS for parking management

Using a SaaS product for parking management can allow you to:

  1. Sign in to the parking management software from anywhere and real-time access statistics of car parks.
  2. Respond to multiple queries regarding parking at once. Users of the software need to adapt when environmental, legal and other logistical changes happen in the system.

Where can parking management and control systems be used?

The following industries will benefit from the inclusion of an efficient management and control system:

  1. Multi-story car parks with multiple entrances and exits
  2. Businesses/Companies with more than one parking compound on site
  3. Hotels and conference centers
  4. Hospitals, clinics, and medical facilities
  5. Commercial car parks
  6. Airports and train stations
  7. Malls and shopping complexes 

parking management

The best parking management and control systems around the world

  • ParkOffice

ParkOffice/Wayleadr is the best parking management software for smart offices. This software optimizes the car park management system, generates employee parking revenue, and reduces carbon footprint. In addition, companies can integrate Wayleadr with their parking hardware and software systems to streamline the parking process.

Wayleadr can be synced with the access control systems in your company. Doing so will ensure that only employees with valid bookings can access the car park. The parking management software can also be synced with sensors and cameras, maximizing usability. 

  • Parkalot

Parkalot is a cloud-based parking control system that allows companies to create and allot parking spaces and make prior reservations. The web application handles all the parking problems of the company and allows other employees to manage their parking spaces online. 

Here is how Parkalot solves parking problems:

  • Your office manager can create a parking lot with a limited number of slots and invite colleagues
  • Some slots go to the management team and a few others go to people who come from far. These employees should confirm their reservations a day before or by 09:00 am
  • Out of all the proposed occupiers of the parking spaces, some of them have confirmed their reservations
  • Now all the other unreserved spaces are available for booking by other employees
  • Before the day begins, all employees get to see the utilization of parking spaces and can plan their mode of transport accordingly
  • Parkable

Parkable is a park sharing platform that manages the parking of both tenants and employees. Using Parkable, one can find near parking spots and reserve them well—ahead. Additionally, you can also charge your electric vehicle using this software. 

Booking on Parkable is easy, and you can book a slot for as long as you want. All fares you see on the software do not contain any hidden charges. Pay for the space and get receipts directly to your inbox. 

  • Secure Park

Secure Park is a SaaS parking platform that helps companies achieve optimal parking control. Some of the features of Secure Park are visitor management, license plate recognition, access control, and much more. One can rent, lease or book parking spaces online via Secure Park.

  • Izix Parking Management

Izix provides flexible and streamlined management tools to simplify booking experiences for end—users. It can improve parking efficiency by using advanced insights to manage demand and bring new mobility rules. Izix’s goal is to facilitate a better urban life. 

The future of parking management and control systems

Technologically driven parking management and control systems simplify traffic, optimize traffic management and reduce air pollution. Software that optimizes and can solve urbanization, pollution, population, and more vehicles. Therefore, parking management and control systems are much needed today. 

By B Naomi Grace

small business coach