Are you setting up an event-planning business but are lost when it comes to legal requirements? Having a name, vision, structure, capital and potential clients is not enough. There are some legal obligations before you can start planning those events!
Here is a list of 6 very important legal steps you must take when starting your business.
Register the Name of Your Business
You might be very excited that you thought up a catchy or clever name for your business. But before you get too attached to it, you need to ensure you are not infringing on the rights of another business.
If you have a lawyer, they can help you do a search or you can do one yourself. Look at business names registered with the Secretary of State. You should even search on social media to see if there are any existing businesses with the name you want.
You have to register a Fictitious Business Name (FBN) or Doing Business As (DBA). This tells the state what is the name of the business you are operating under. If you would like to operate under your own name, then you don’t need to register for a DBA. This is because if you don’t register for one, then your business name would be your actual name by default.
You must note that registering your business name does not mean you have trademarked it. This is a separate process (see number 5).
Incorporate Your Business or Create an LLC
This step is necessary for protecting your personal assets from your business liability. Research to understand whether incorporating or forming a Limited Liability Company (LLC) is better for your business.
Most small businesses decide to form LLCs. They are simple yet flexible and still have tax advantages. LLCs can be owned by both businesses and individuals. Corporations institute bylaws to establish management rules. They also issue shares of stocks to attract investors. The opportunity for corporate income-splitting may also reduce tax liability.
It is important to create an LLC or a corporation properly. Then any ruling against your business will not affect your home, car, savings or child’s college funds!
Apply for a Federal Tax Number
You will also need to apply for a Federal Tax Identification Number or Employer Identification Number (EIN). This legally distinguishes your business. The Internal Revenue Service (IRS) issues the EIN. It is used to track your business transactions. It is like a social security number for your business.
You can apply for an EIN with the IRS EIN Assistant. Your EIN can be used to open your business bank account and file your business tax returns. It is also needed for applications for business permits and licenses.
Get All Relevant Permits
Each industry has certain permits and licenses that businesses need to get. The types are also dependent on your location. You may need permits from the federal, state or local levels. Some of these include:
- Business operating licenses
- Health licenses and permits
- Zoning and land use permits
- Occupational licenses
- Fire department permits
- Signage Licenses
Research the Applicable Laws and Regulations
As an event planner, you need to be aware of the laws and regulations that apply to your industry. Your legal obligations include employee laws, OSHA regulations and reporting requirements.
Find out what your obligations are and understand them thoroughly. Enlist a lawyer to help if you need to. Make sure you also understand what you need to do to be compliant. You have enough to deal with within your business. You don’t need to have potential legal matters to the list.
File for Trademark Protection
You should also do what you need to ensure that other people do not infringe on your rights. While it is not required to file for a trademark by law, it is recommended. This gives your business proper legal protection. When you register a DBA only, it may not give you common-law rights.
You can register a trademark online with the US Patents and Trademark Office. Your trademark can have standard characters, logos, symbols, and even sounds. The application also asks for a drawing or specimen of your trademark.
There are many things to consider when setting up your event-planning business. It is more beneficial to put your legal obligations in place at the beginning. You will have much smoother sailing in the long run. So do the necessary research, get help and advice if needed, and get everything on this list done. You will thank us for it later!
At what stage of the process are you in starting your business? Is there anything on this list that you weren’t aware of? Anything you would have added? Let us know in the comments!