Three important steps to consider when launching your business

While choosing a business name can be exciting, you also need to make sure that your company’s legal name complies with state laws. One of those laws requires the legal name to be available in the state. That means the name is not already on the Secretary

If you are starting a business, it’s important to remember that actions you take now can have significant consequences in the future.

While this can apply to many aspects of the startup process, the three main steps you need to address include deciding the best structure for your company, choosing and reserving your company name and selecting a registered agent in the state(s) where you’re planning to conduct business.

Protect Your Assets By Choosing The Business Organization That’s Right For You

Choosing a statutory business organization instead of operating your business in your own name presents several benefits. There are many business organization options available. However, the two most commonly used are the Limited Liability Company (LLC) and the corporation.

Using a corporation or LLC establishes immediate legitimacy and credibility for your new venture. Vendors, partners and customers often prefer conducting business with a statutory business organization. In addition, it allows for asset protection. As an owner, you’re able to distinguish, separate and protect your personal assets from business debts and liabilities.

Once you decide on your preferred company structure, you should look for a trusted service provider with the proper expertise to help you navigate each step of the organization process, and ensure your company stays compliant with state and federal requirements as you attain specific milestones for your business.

Reserve Your Business Name

While choosing a business name can be exciting, you also need to make sure that your company’s legal name complies with state laws. One of those laws requires the legal name to be available in the state. That means the name is not already on the Secretary of State’s records as belonging to another company. If your desired business name is available, you should reserve it with the state before filing any paperwork to form your corporation or LLC.

Even if your legal name is not on record with the state, that doesn’t mean it isn’t currently being used by another entity in commerce as a trademark. Therefore, you should consider performing a trademark search on any name you choose, to ensure that it does not infringe upon someone’s trademark rights.

If you have aspirations to expand your business into other states, you should consider whether the name is used in those states. You should also identify if your desired name is available for online purposes. Be mindful of pre-existing domain names and what types of services similarly named companies offer.

If you plan on using your business name as a trademark (meaning you are using it in commerce to identify your goods or services), then to protect your business name nationwide and legally, be sure to register a trademark. This will prevent others from subsequently using an identical or similar name that could confuse or deceive consumers. To qualify for a trademark, the name you choose must be “distinctive”—meaning completely unique and not a name that would be confused with any other product in the market.

Designate A Registered Agent

A registered agent is a business or individual that receives legal papers, such as a summons and complaint, and certain official state documents, including tax forms and annual corporate and LLC reports on behalf of a business.

As a business owner, you must designate a registered agent in every state where you conduct business. The business owner can act as the registered agent, but this is often difficult or not possible due to the business’ physical location.

Selecting a professional registered agent provides several benefits. The first is peace of mind. You can rest assured knowing that your registered agent has knowledge of all legal or government documents served on or sent to your business. The registered agent acts on your business’ behalf and has the expertise to handle documents correctly. Registered agents will complete work processes promptly, efficiently and discreetly— ensuring your business remains compliant and is positioned for continual growth.

Raja Sengupta is the Executive Vice President and General Manager for CT Small Business, which provides compliance solutions to small- and mid-sized corporations and entrepreneurs, as well as the advisers who serve them. CT is a Wolters Kluwer Company.

To learn more, visit ct.wolterskluwer.com.