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Global Entrepreneurship Week: Keeping Your Business Legal - ThinkstockPhotos-159447180-c.jpg

How to keep your business legal

Update November 2017

It’s a month of celebration for entrepreneurs and small business owners!  So in celebration of small businesses, here are a few tips on how to keep your business legal, safe, and protected for the long haul.

Working with a third party? Get it in writing

You may be a one-person business show but at some point, you’ll probably get into a contract with a third-party. When that time comes, be sure to get your agreement in writing. When you put it in writing, you have the opportunity to outline the expectations and the responsibilities of both parties. A legally binding contract helps reduce the risk of conflict that may happen later down the road.

Growing your business? Incorporate

One of the biggest benefits of incorporating is the protection of your personal assets. Simply put, your business becomes its own legal entity — creating a legal division between you and your business. If you’re unsure which business structure to incorporate as take this quick quiz to find out what entity would work best for your situation.

If you’re new to the business world, check out our Starting a Business guide. It gives you a quick and simple rundown of what you should do as a new business owner.

Hiring employees? Educate yourself on HR basics

When hiring employees, a whole new set of laws come into play. It’s important that you educate yourself upfront on these human resources guidelines and regulations so your business stays legal. We have an easy-to-read Human Resources 101 guide that will help you learn everything you need to start hiring employees the right and legal way.

It also never hurts to have an employee handbook that establishes certain rules of conduct for your employees to ensure that your work environment is safe, healthy, and positive for all company personnel no matter the size of your business. An Employee Handbook allows you to set out the internal rules for your company. It can create a paper trail that can be really valuable if things go south with someone you work with.

Selling items? Get your permits and licenses

If you’re selling anything tangible, you should make sure you get a seller’s permit. Additionally, if you’re selling special items (e.g., alcohol, tobacco, or firearms), you may need certain licenses. Without proper licenses, you can be subject to fines or even temporary closure of your business. Check out the Small Business Administration site to learn more.


Starting a business can be fun and stressful. Rocket Lawyer is here to help you make sure you are covered. If you have any questions you can always ask a lawyer or check out our help center on running a business.

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