When starting a new fashion business, planning for potential legal issues is essential. The last thing you need to be focusing on is damage control.
When forming a business, it’s easy to get caught up in the excitement of running the business. However, failing to take the appropriate legal steps can set a company off on the wrong foot.
- Not Establishing your Business Properly.
This is one of the most common blunders that costs. By forming a limited liability company (LLC) or a sole proprietorship, small business owners keep their businesses in the right tax category. This is a great way to protect your personal assets from any liabilities your business might suffer. Further, separate bank accounts keep everything in separate financial lanes. mixing personal and business assets can leave a small business owner responsible for business debts or claims against the company.
- Not Working with Contracts
A handshake deal won’t protect your business when problems arise. The terms of every deal and who has what responsibilities needs to be well detailed. Without contracts, you’re leaving yourself open to legal liabilities. They are the best legal umbrella to use if you need to talk business to folks outside your organization.
- Not protecting your Intellectual Property
In a word, protecting your intellectual property means having exclusive control and creative rights over the ownership of the goods and services you create and sell.
- Not Filing Taxes or Other Documents on Time
As a startup fashion entrepreneur, it is a fact that you have so many things to put in place, filing tax returns and other important documents might be done late or never due to the bulk load of work you need to do in order to make profits. That leaves your business open to federal and state fines. Getting the proper legal and tax advice from the beginning is the remedy here.
- Not Having Clear Guidelines
Taking shortcuts when forming a business can seem like the easiest or fastest solution in the moment, but it can also put business owners in a number of dangerous situations. Paperwork often feels daunting, but taking time to do things the right way saves businesses from major headaches down the road.
The most important mistakes every fashion entrepreneur should avoid is waiting for an issue to arise before consulting with a legal advisor. Signing contracts, hiring vendors and employees, these are all matters that need to be done within specific legal guidelines.