1. Choosing the Wrong Legal Entity
Many businesses start as sole proprietorships or partnerships. But this may not be the best choice as your business grows. If you are not operating as an LLC or a Corporation, you could be personally exposing yourself (including your house, your savings and other assets) in case of a dispute with a customer, employee or vendor.
2. Not Registering Your Business
In order to operate in certain cities and counties, you must register your business with the local government. You may additionally need to register to collect sales tax, seek health department approval or obtain a license. By not properly registering, you could subject your business to increased taxes and fines, or in some cases, closing of your business entirely.
3. Bad Contracts
Having a bad contract can be almost as detrimental as having no contract. Many businesses still operate on handshake agreements. And, although a verbal contract is legally valid, problems can arise if there is a dispute because it’s difficult to prove the terms of the contract. Creating a contract from an online sample may also backfire, because many times, the terms are not specific to your particular needs or what’s legally relevant in California.
We personally know how rewarding it is to own your own business, and the hard work you put into making it grow and thrive. Take the extra steps necessary to properly protect yourself and your business from potential pitfalls. If you want to learn how to get started, give us a call. We’d love to hear from you.
Glendale Location
616 E. Glenoaks Boulevard, Suite 203
Glendale, CA 91207
Sherman Oaks Location
15303 Ventura Boulevard, Suite 900
Sherman Oaks, CA 91403