Regardless of how promising your business startup seems, it’s critical to establish a solid legal foundation as part of your launch process. Not doing so can expose you and your business to unnecessary risk potential legal problems. While every venture is unique, there are a number of steps that owners should take to increase their odds for success and protect their bottom line. Some key legal issues that business startups in Arizona should pay close attention to during the formation process include:
- Choosing a name — Once you have chosen a business name, you should conduct a search to determine whether other businesses are using the same name or something similar. It’s best to consult with an attorney to determine whether any legal issues could arise because of potential confusion with another business.
- Selecting an entity type — There are several different business entity types recognized in Arizona, including corporations, partnerships and limited liability companies (LLCs). You should carefully consider the tax and liability issues associated with each to determine which is the right entity for your business.
- Filing formation documentation — If you choose to create a corporation, you must submit formation documentation, including Articles of Incorporation, with the Arizona Corporation Commission Corporations Division. If your business is an LLC, the Articles of Organization must be filed.
- Completing the transaction privilege tax application — Vendors might need to file a transaction privilege tax application with the Arizona Department of Revenue. This establishes the mechanism for businesses to pay what is commonly referred to as a sales tax.
- Registering the business locally — You may need to register your business in the city or county in which it is located, as well as obtain any necessary permits or licenses.
- Obtaining an EIN or TIN — An employer identification number or tax identification number must be obtained from the IRS.
- Opening a business bank account — Having a business account is crucial for recordkeeping, establishing the credibility of your business, and for tax purposes.
In addition to being aware of any applicable laws and regulations regarding formation, business owners also need to consider employment law, real estate and risk management issues. A knowledgeable business formation attorney can help you determine what challenges your new business might face and how to tackle them effectively.
The Law Firm of Joseph M. Udall, PLC in Mesa works with startup owners and entrepreneurs throughout all stages of the business formation process to help ensure they are making the right decisions and their interests are protected. Offering knowledgeable counsel to clients throughout Maricopa County surrounding areas, we are dedicated to providing high-quality legal services to small and large businesses. Please call 480-500-1866 or contact us online to schedule a consultation.