Although starting a business is a significant achievement and one to be excited about, it comes with some responsibilities and may also be intimidating. As you consider the kind of business structure to adopt for your business, a limited liability company (LLC) is the right choice. It would help if you also looked out for others’ mistakes when forming their LLCs, so you avoid them.
Here are some of the mistakes you need to steer away from as you se up your LLC :
Considering Your Business Too Small for an LLC
There is a common misconception that the business must be too big to incorporate it or form an LLC. The reality is that no business is too small to be an LLC because this form of business allows even one member to start this kind of business.
It would be best for you to consider starting your business as an LLC even before you reach out to your first client. This is because you need to enjoy the legal protection that comes with running this kind of business. Even those who run side hustle businesses can register them as limited liability companies.
Choosing the Wrong Name for Your LLC
When we talk of a wrong business name, we mean one that is already being used by another entity. It would be best for you or the incorporating service provider you are working with to do a thorough name search before registering your business under the name. It is also critical to search your intended trademark in the database for trademarks at the US Patent and Trademark Office to ensure it is not used elsewhere.
Also, an in-depth Google search for your proposed name can make you know about other users or uses of the name. You do not want to use another entity’s name and get into legal battles, which can be costly. You will also lose for giving up a brand name you had invested a lot to build.
Thinking That LLC Registration Is a Business License
Once the relevant state office sends you a certificate for authorization as an LLC, it indicates that the government has licensed your LLC to carry on with its business. However, several industries and sectors require people practicing in them to obtain licenses to engage in the field. Some of the trades that need a license besides LLC include medicine, engineering, pharmacy, and many others. So, ensure you get the license for your area of specialization to avoid problems with law enforcers.