Before an entrepreneur can open the doors of a new business, he/she must address and confront a variety of legal issues in deciding the organizational form the business will take before welcoming the first customer.

1. Choice of entity from among corporations (“C” and “Sub-chapter S” corporations); general and limited partnerships, limited liability companies (single- and multi-member LLCs), limited liability partnerships and sole proprietorships. Issues such as tax consequences, limiting individual liability and transfer of ownership interests need to be addressed.

2. “Corporate governance.” How much detail should be included in initial corporate (or partnership or LLC) documents; what is going to work best for each business. Details of corporate or other business formation, such as appointment of a registered agent, registration of trade names, etc.

3. Raising capital. Legal pitfalls in raising investment capital and typical requirements for bank or SBA financing for small businesses.

4. County and municipal regulation. Fictitious name registration, business licenses and taxes, personal property taxes.

5. Workers compensation insurance and unemployment compensation insurance are generally required for businesses with employees.

6. Doing business in another jurisdiction means registering with the state, complying with varying state laws regarding sales taxes.

7. Labor laws. Minimum wage, wage payment laws, discrimination laws and the Family and Medical Leave Act. Virginia is an “at will” employment jurisdiction but other states may not be.

8. Protecting trade secrets may be vital for start-up companies. “Covenants Not to Compete” and “Confidentiality Agreements” with employees.

 
 
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