to Consider When Starting a Company From business structure to taxes, there are numerous legal issues to address when starting a company, many of which can bring a promising start-up to a grinding halt if the proper steps are not taken. The following four issues most frequently cause problems. Trademarks :  Register your trademark. Simply [...]

Sources of Law Constitutional Law is based on a formal document that defines broad powers. Federal constitutional law originates from the U.S. constitution. State constitutional law originates from the individual state constitutions. Statutes and Ordinances are legislation passed on the federal, state, or local levels. Common Law is based on the concept of precedence – [...]

Ways to Reduce Legal Costs Once a small company having no in-house legal staff finds itself in litigation, it already has lost since the legal fees it pays may be large with respect to the company’s size. In the U.S., losers do not have to pay the winner’s legal fees, except in the case of [...]

Duties to One’s Former Employer When starting a company, many entrepreneurs believe that the end justifies the means, and may be lax about fulfilling obligations to former employers. However, the fastest way to put a startup out of business is to sue it for violating duties to a former employer. Even if no duties were [...]

The sole proprietorship is the most common form of business structure for small companies. It is viewed as being one and the same as its owner. This characteristic has the advantage of simplicity but also has the disadvantage of personal liability. Taxation A sole proprietorship has pass-through taxation. The business itself does not file a [...]

A general partnership (or simply partnership) is an association of two or more people carrying on a business with the goal of earning a profit. A partnership is viewed as being one and the same as its owners. There is little formality involved in creating a partnership. In fact, if someone can establish that you [...]

A limited partnership (LP) consists of two or more persons, with at least one general partner and one limited partner. While a general partner in an LP has unlimited personal liability, a limited partner’s liability is limited to the amount of his or her investment in the company. LP’s are creatures of statute since they [...]

  The corporation is the most sophisticated form of business entity and the most common among large companies. The corporate business form was well-developed under Roman law. In the second and third centuries, the corporate form was used by the early Christian church to hold and transfer church property, for example, for transferring control of [...]

Preservation of limited liability is an important issue specific to corporations. The corporate protection of limited liability can be lost through: Piercing of the corporate veil Defective incorporation Improper signing of documents. Piercing the Corporation Veil A court may pierce through the veil of liability protection if the corporation does not follow proper corporate formalities, [...]

The internal affairs of a corporation are governed by the laws of the state in which it is formed. A corporation does not have to have an office or do business in the state in which it is incorporated; it need only have a registered agent in that state. There are companies such as CT [...]

Historically, Delaware has been the state of choice for incorporation. However, some other states such as Nevada have shaped their corporate laws in order to attract corporations. Here is how Delaware and Nevada compare on several points: Taxes on corporate earnings: Delaware taxes the proportion of corporate profits earned in Delaware. Nevada is tax-free, regardless [...]