Legal Protection for New Business

Small Business Law

  • Legal Protection for New Business


    • Legally Protecting Your New Small Business


      How to legally protect your new small business

      September 5, 2006

      By Elias Stassinos, Esq.



      Many of my clients starting a business ask me how to launch their new small business without any of the legal problems involved in starting a business.  Even though, there are several legal issues that come up in starting a business, pay attention to the following:


      Choosing a Business Legal Structure


      You can choose a sole proprietorship, a partnership, a limited liability partnership, a limited liability company, or an S or C corporation. Unless you have an attorney advising you, you may want to delve into this to make sure which of the above forms of legal and tax business structures is the most advantageous to your particular tax situation.  Each business structure involves legal and tax consequences that directly affects the protection level each affords.  If you understand the implications, you may want to just go ahead and file your business documents to start your business. Alternatively, you can consult with an accountant and lawyer when your business or you can afford one.



      The most favorable business structure to you is a structure that separates you (and your personal assets) from your company.  To achieve the separate entity status, you need to incorporate by forming a corporation or form a limited liability company (LLC). The separate status shields your personal assets from possible tax and legal claims related to your company.  For example, lets assume you sell motorcycles and motorcycle parts.  If you form an LLC and your company sells a defective motorcycle part, and the part is the cause of an injury, you may be sued.  If you lose in court, the claim can be satisfied from any of your companyís cash or companyís assets.   If there are not enough company assets, the claimant cannot proceed to sue you personally and satisfy a judgment against your company by seizing your personal assets.  As you can understand, incorporating or forming an LLC, protects you personal assets.


      Company Name


      You can give your business almost any name you desire  and even give it more than one name.  The name of a business, if it is not the last name of the owner or the legal name of an incorporated company,  is called a doing business as (dba), business name, trade name, fictitious name, or assumed name.  A business can use another name or an additional business name if it wants to specify its product or service or to avoid conflict with another company with a similar name.   If you just filing a dba, in most states, you can register a name that is already registered by another company but that might entail legal consequences if the other company decides to sue you to stop you from using its name.


      Is my Trade Name a Trademark?


      A trademark is a word or symbol used to identify a product or service to the consumer.  Thus, a trade name cannot also be a trademark unless it is also the name of a company product or service.   If you want to choose a unique name and donít want to run into trouble, make sure that the dba name you choose is not registered either as a business name, a corporation or LLC name or a trademark.   An attorney can perform a search and make sure that the name does not already exist.  If you cannot afford an attorney or the time to clear the name, perhaps you should go ahead and start your business till you can afford the clearing of your business name.


      Is a Business License Required?


      Getting a business license is a requirement for all businesses.  First incorporate or form an LLC and if required, file a dba.  Then, get your business license.   The issuance of a business license is a business tax registration at a given level of the governments in your state. It can be at the state, county and or city level.   Regardless of where you get your business license, it is a legal requirement and there may be civil and or criminal penalties if you donít obtain it.


    • All legal articles in this site are general and informative.  The articles or any other information on this site is not legal advice nor is any information warranted or guaranteed.   Laws change over time and in different localities and jurisdictions laws may be different from any laws mentioned on this site.  It is advisable that you consult a  attorney and or an accountant in the area where your business will be located.

    • Elias Stassinos, Esquire  is a trademark and incorporation attorney that has helped thousands of  small business owners and entrepreneurs launch their first business enterprise.  He's also an entrepreneur who operates several successful businesses not related to his law practice. 

    Copyright © E. Stassinos, Esq. 2005. All Rights Reserved.