Start Your Startup: Five Steps to Starting a Business Legally

Your brain is probably brimming with ideas for your startup, but ideas require action before they can take shape! Follow these 5 steps to ensure you meet the legal requirements for starting a business. [1]

Starting-a-Business-LegallyStep 1: Choose and Create Your Business Entity

The first legal step towards starting a business involves choosing a business entity. [2] Sole proprietorships, partnerships, limited liability companies (LLCs), and corporations are among the most common legal structures. Each type of entity has different characteristics in terms of liability, taxation, financing, organizational structure, and financial benefits or drawbacks. You can also adopt characteristics of different structures by agreement to make your own Frankenstein business entity. You’ll want to research your options thoroughly and choose the best entity to meet your business goals.

Step 2: Create Operational Documents

Depending on the type of entity you choose, you may want to create documents that establish how your business will run. While sole proprietorships, partnerships, and LLCs don’t require you to file operational documents with the state, the latter two may benefit from a partnership agreement or an operating agreement. These contracts essentially help establish expectations amongst partners/owners in order to manage disputes and define rights in the future. They also establish procedures for what to do when the company is faced with specific types of upheaval, such as if an owner passes away or one wants to sell the business and the other doesn’t.

Corporations in Florida must file Articles of Organization with the Department of State (DOS) and appoint a registered agent for service of process.[2]They must also create bylaws to dictate the corporation’s internal operating rules and a number of other operational standards and processes for shareholders.  

Step 3: Obtain Permits and Licenses

The next step is to secure any licenses and permits you may need to do business. Most businesses in Florida need to get a general business license or business tax receipt through the city and county where the business is located. You’ll need a federal Employer Identification Number (EIN), which is like a corporation’s version of a Social Security Number.[3] Register your business with the Department of Revenue (DOR) in order to collect sales tax. Depending on your occupation, you may also want—or be legally required—to get a professional or occupational license.

Step 4: Draft Contracts

Identify the types of contracts you’ll need to run your particular business with the right amount of legal coverage. An attorney will know exactly what to look for and how to express your desired terms using the proper legal terminology. Examples include:

  • If you want to rent a space to run your business, you’ll need a lease.
  • You need an employment contract to outline your employees’ obligations to you (and your obligations to them).
  • A sales contract describes the terms and conditions involved in the purchase of your goods.
  • For businesses that provide services, a client contract helps to delineate the services you’ll provide along with any relevant details, such as your fees and completion date.
  • An independent contractor agreement can clarify your expectations when you need to outsource your work to another vendor.
  • A non-disclosure agreement (NDA) or confidentiality agreement can keep your sensitive information private when you need to share your company’s proprietary information.

You can make a master contract in most of these cases and amend it for every new employee, client, and so on.

Step 5: Hold Annual Meetings

Are you complying with all of your company’s legal requirements? According to the laws in every state, corporations are legally obligated to hold annual shareholders’ meetings and record the minutes. Partnerships and LLCs must usually do the same, though they will need to document different types of events in their minutes. The IRS will usually ask for your minute book in the event of an audit, so it’s in your best interest to meet at least once a year make sure everything is thoroughly documented.

An experienced lawyer can help you with every step required to start your business, and more. Contact Muir & Associates to get dependable legal counsel. Our business attorneys can ensure your company meets all of its legal obligations, provide you with tips to protect yourself against liability, and much more.


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Author Bio

Jane Muir

Jane Muir is a Shareholder and Managing Partner of J. Muir & Associates, a Miami business law firm she founded in 2018. With more than 13 years of experience in business, she is dedicated to representing clients in a wide range of legal areas, including business litigation, contracts, corporate formation, insolvency, nonprofits, partnership disputes, and other business law matters.

Jane received her Juris Doctor from the University of Miami School of Law and is a member of the Dade County Bar Association and Coral Gables Bar Association. She has received numerous accolades for her work, including being named among the “20 Under 40” in 2016 by Brickell Magazine. Super Lawyers named her a Rising Star from 2014–2019 and selected her for the Super Lawyers status.

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