October is National Women’s Small Business Month, a celebration of the more than 11 million woman-owned businesses in the United States and their fearless leaders. According to research conducted by SCORE in a recent infographic, 1,071 woman-owned firms are started every day. Since 2007, women have started businesses five times faster than the national average.
As more women pursue entrepreneurship, it’s important that they conduct their due diligence. They must understand which legal steps to take so they can protect their small businesses and intellectual property. There are several items all entrepreneurs must be able to cross off their legal to-do list, including covering these key areas:
- Incorporate or form a limited liability company (LLC) to protect the business.
- Register for trademarks to ensure exclusive rights to the marks.
- File for necessary business licenses.
- Obtain an employer identification number (EIN) to hire employees.
- Determine who will act as your registered agent.
- Keep up with annual maintenance to stay in compliance with the state.
You’ve drafted a business plan, reviewed the viability of your business idea and accessed how much capital you’ll need to start your business. Now, it’s time to protect your startup.
1. Incorporate the business.
This is one of the basic, first steps many entrepreneurs take to protect their small businesses. An unincorporated business struggles to establish credibility, and it does not receive liability protection like an incorporated formation. An incorporated business receives liability protection. This allows personal and professional assets to remain separate from each other. It also ensures that personal assets, like houses and cars, are protected in the event of an unforeseen circumstance that may negatively impact the company.
Entrepreneurs may choose to incorporate as one of several different types of business structures. Here’s a look at some of the most common, and popular, options