January 23, 2024

Navigating the Corporate Legal Landscape: Essential Tips for Running a Business in 2024

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So, you are thinking of starting a business in 2024. That is awesome!! It’s normal to feel overwhelmed. It’s also normal to make rookie mistakes like I did when I went to file my EIN paperwork in 2014. That was new to me, and I almost got scammed by a jerk with a fake IRS web portal who was offering “expedited” EIN filing for a fee (news flash: there’s no fee, always free, and always fast from the IRS). The minute I clicked in, I knew it wasn’t the IRS… and the guy was extremely aggressive. He only backed off after I disclosed I was a lawyer and would happily report him to his state attorney general for running a clone site. I felt like a fool for sure, but it taught me a lesson and it was a lesson I shared with lots of clients going forward. So, what do you really need to know this year to get going? This list isn’t exclusive mind you, but it’s a start.

1. Know When to Do it Yourself and When Not to Do it Yourself. Doing it yourself is great but being “penny wise and pound foolish,” well… not so much. Find a skilled professional team (CPA, bookkeeper, lawyer) who are willing to work with you to make sure you get off on the right track. I know marketing funnels are more fun, but you can’t scale from a faulty foundation. Gotta have a solid framework.

2. Have a Strong Operating Agreement. If you own an LLC, most banks now will not let you open an operating account without an operating agreement. An operating agreement is the rules of the road for your entity and your entity is a business, even if you are the only owner. Have one. If you have a trust, make sure your trust is the member of your LLC. Your heirs will thank you later.

3. Do NOT Sign a Lease Without Reviewing It. Really. Let me say that again…DON’T DO IT! It may seem these days like no one is renting office, retail, or restaurant space but while most businesses have shrunken their footprints, they haven’t eliminated it. Leases are liabilities (usually your biggest one), and they are always stacked against you. Find a good broker, negotiate from a strong position, and please do not sign without your lawyer reviewing it.

4. Embrace Technological Advances. In 2024, technology plays a pivotal role in all facets of your business operations. From data privacy concerns to intellectual property protection, know what you are keeping and what you are giving away. “Free” is a friend to someone starting a business but if it costs nothing, you (or your customers) are likely the product, and that increases your liability. Regularly assess and update your cybersecurity measures, implement robust data protection policies, leverage technology for efficient contract management, and for the love of God, have cyber insurance.

5. Compliance is Non-Negotiable. Compliance with local, national, and international regulations (consider EU privacy laws as a big one here) is a cornerstone of a successful business. Regularly review and update your compliance protocols, ensuring they align with the latest legal requirements. Also, conduct regular legal audits to identify and mitigate potential risks. This includes adherence to environmental regulations, labor laws, and industry-specific standards. Things are popping again in employment law (they have been for the past few years). Don’t feign ignorance on classifying and paying employees. Get help where needed. Identifying and addressing legal issues proactively can prevent costly disputes and litigation.

6. Prioritize Intellectual Property Protection. With innovation driving business growth, safeguarding intellectual property is paramount. Ensure that your trademarks, patents, and copyrights are adequately protected. Stay vigilant for potential infringements and be proactive in taking legal action (like a cease and desist letter, not necessarily a lawsuit) to protect your intellectual assets.

7. Draft Clear and Comprehensive Contracts. Well-drafted contracts are the foundation of a healthy business relationship. You can find good form contracts and even use AI—BUT the trick with your contracts is making sure they are tailored to your unique business needs. Work closely with a legal professional to turn that “form contract” into something really useful for your business. Ask for flat fees. I always offer them in this area. Review and update your contracts annually to adapt to changing business dynamics and legal requirements.

8. The Corporate Transparency Act (“CTA”). This is a new law and much too complicated to summarize here, although we have in recent blogs (Click Here!), but if you are setting up a new business in 2024, you have 90 days to file what is a called a Beneficial Ownership Information (BOI) report. If your business already existed prior to January 1, then you have until January 1, 2025. I don’t recommend waiting til the last minute on this one though. This law is aimed squarely and exclusively at small businesses (big businesses are exempt) and if you are a “Reporting Company” (as defined under the law), you will need to file a BOI report for every beneficial owner and decision maker in your company. The purpose is for law enforcement to have a clear view into the people who own and control companies to ferret out money laundering. You can find more information from FinCEN, a little-known bureau of the Treasury Department tasked with implementing the CTA, by visiting their website here: https://www.fincen.gov/boi.

Good luck and holler if you need any help!!