What legal steps should every new business take first?

Essential legal steps for new businesses

Start by choosing the right business structure, registering your business, and protecting basic legal and tax requirements. These foundational steps reduce risk and make future growth smoother.

Checklist:

• Choose a legal structure (sole proprietorship, LLC, corporation) based on liability and tax needs.
• Register your business name (DBA) and domain.
• Obtain required licenses and permits for your industry and location.
• Apply for an Employer Identification Number (EIN) for tax reporting.
• Open a separate business bank account and set up basic bookkeeping.
• Draft simple contracts: customer terms, NDAs, and supplier agreements.
• Consider basic insurance (general liability, professional liability, or workers’ comp).

Practical considerations

Choosing an entity like an LLC is common for small startups because it limits personal liability and is relatively simple to maintain. Corporations are useful if you plan to raise venture capital. Licensing requirements vary by local jurisdiction—check city, county, and state rules.

Contracts and IP

Use clear written agreements for co-founders and early contractors. A founders’ agreement should cover equity split, vesting, and roles. If you have unique technology or branding, consider trademarking and documenting inventions to establish ownership.

When to get professional help

Consult a small-business attorney or accountant for strategy on entity selection, tax planning, and compliant contracts. Early advice can prevent costly fixes later, especially if you plan to raise funding or hire employees.