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If you feel in over your head when it comes to understanding the legal requirements for starting a business, you’re not alone. 

It can feel like there are a million steps. A gazillion boxes to tick.

And you’re terrified that if you miss one of them, something terrible will happen. Like getting sued or having the IRS come after you.

*Cue panic*

😰

Your mind is most likely swirling with questions. 

Ones like:

When should I apply for my trademark?
Do I need a copyright registration?
Should I register my business?
What’s an EIN and do I need it? If so, when should I get it? 

Do I need contracts and who do I need them with?

If you’re completely lost when it comes to legally setting up your business, you’re in the right place, friend.

We’re going to give you a step-by-step overview of the legal requirements so you know *exactly* what you need to do to legally set up your business, and when to do it, too. 

Let’s get started. 👇🏽

How Much Does It Cost to Legally Set Up Your Business? 

First things first, let’s talk about what’s probably on your mind.

How much is this going to cost me? 

One of the biggest fears many small business owners have is that the legal costs associated with starting a business are going to break the bank. 

If you’re just starting your business, you need to be able to assess what you’re able to financially invest. If you’re working a job right now while you put the pieces in place for your business, begin to save up some funds.

You want to have as MUCH saved up as possible so you can have a safety net in place and you know you’ll be able to cover your minimum living expenses while you’re in growth mode. 💪🏽

Ultimately, when it comes to your legal foundation, you want to have at minimum between $1-2k saved to cover the legal requirements of starting your business.

That will cover both your contracts and setting up a business entity, which are two must-have pieces of the legal puzzle!

There is a ton more you can do to (legally) set your business up for success, but we don’t want to overwhelm you! 

By sticking to these three core legal requirements, you’ll make sure you’re meeting the bare minimum basics so that your business is legally legit.

(And you can say goodbye to nightmares about getting sued once and for all 😅👋🏽)

Step #1: Written Contracts

Remember the golden rule of business.

You must have a written agreement in place with anybody that you enter into a professional relationship with.

  • If you’re doing business with someone
  • If there’s a transaction taking place
  • If you’re exchanging money or services

While most people realize they need an agreement with their clients, they might not realize they need a contract for podcast guests or a contract for affiliates.

No matter WHO you’re entering into a business relationship with, get the terms of the relationship in writing.

You want to make sure there’s a contract in place so both parties are *crystal clear* on what everyone’s obligations and expectations are. 

Never skip this important step!
Are you an online coach? Check out this post for 13 must-have clauses in your coaching contract.

Step #2: Protect Yourself by Setting Up An Entity

The next step to protect your new business, is to set up a business entity.

This will help provide separation and liability protection from you personally. 

This means that if things ever go sideways in your business, your personal assets won’t be on the hook!

Setting up a business entity (usually either an LLC or corporation) is relatively easy to do, and can be done online for just a few hundred dollars. 

Unsure of what business structure you need? Learn about the main differences between an LLC and a corporation here. 

Setting up your LLC or corporation can easily be done on your secretary of state’s website or your local jurisdictions’ website. 

Don’t Forget Financial Separation

Once you officially form your business entity, the next step is retrieving an EIN – which stands for an employer identification number. 

The details about your entity formation and your EIN will be KEY to opening a business checking account, so that you can create financial separation. 

It’s not enough to simply create a separate business entity. You have to treat them as totally separate entities as well, and the way you can do that is by avoiding any co-mingling of finances.

That means no more dipping into your personal account for business expenses and vice-versa! 🙅🏽

Step #3: Make Sure You’re Not Infringing on Someone’s Trademark

Your trademark is your brand name, or the name of your signature program or offer. 

If you’re just starting your business, you might not quite be ready to register your trademark.

But a requirement for starting a business you absolutely can’t forget about is making sure you’re not infringing on anyone else’s trademark. 

The LAST thing you want to do is put all this work into building a brand, only to have to rebrand years later because you’ve infringed on someone’s trademark. And potentially owe thousands in legal fees, too. 😬

To make sure you’re in the clear with your brand name, you can do a quick search on the US patent trademark office’s website.

All you need to do is head to the search bar and enter, “basic trademark search” to avoid any potentially messy legal situations.


Check out our ready-to-use, lawyer-approved, plug-and-play legal contract templates! So you can upgrade your client contract while staying Profitable & Protected™✨

Not sure where to begin? We’ve got you. Grab our FREE Legally Launch Handbook to get the legal lowdown on everything in entrepreneurship, without the confusing mambo jumbo. We’re serving it up straight & to the point. (Heads up: It’ll forever transform the way you view your client relationships!) Grab your copy now.

*The information presented in this blog post is for educational & informational purposes only. This should not be a substitute for customized legal advice from a licensed professional in a private setting. If you need legal advice, please consult with an attorney. This is not a law firm.

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