Starting a Business: The Legal Stuff No One Warned You About

Starting a business feels electric. Maybe your notes live in a messy phone app, maybe your kitchen table doubles as a whiteboard, and maybe you’re already picturing the first sale. Then, almost on cue, the quieter side shows up: forms, filings, rules, and contracts. Getting proper guidance from lawyer Brad Nakase can help entrepreneurs avoid costly mistakes in the early stages. And yes, the early stage is exactly when small errors tend to snowball.
Picking a business structure
For starters, that first “What are we?” decision matters more than it looks. A sole proprietorship is quick; an LLC adds a layer of protection; a corporation brings stricter formalities and potential advantages in certain growth paths. Think of Joe, who launched a neighborhood landscaping outfit with a friend. They skipped formal setup because it felt simple. A year later, a mower incident at a client’s property turned into a claim that reached right into Joe’s personal savings. If they had formed an LLC, his personal money and home wouldn’t have been exposed. The choice sets the tone for taxes, paperwork, and risk, so it pays to pause, look ahead a year or two, and pick a path that fits the plan you actually want.
Paperwork and licenses
Next comes the stack of filings: registering with the state, grabbing an EIN, and tracking industry licenses. It’s not glitzy, so it’s easy to push to the back of the desk. Picture a taco truck that nails the menu and branding, lines up a popular corner, and forgets a permit renewal. One visit from the inspector and that big opening day turns into a closed window and a lot of wasted food. Past the first round, renewals and updates keep coming. A quick calendar system and a habit of checking agency emails can spare you late fees and a shutdown.
Contracts: promises in writing
Now let’s talk promises. A handshake feels friendly, and quick email threads feel fast, yet vague language turns into friction the moment expectations differ. A first hire who thought bonuses were guaranteed, a supplier who assumed “rush” meant two days not two weeks, a landlord who slipped in a sneaky escalation clause—each of these stories ends the same way: stress and cost. A clean contract does three simple things: states the work, sets the timeline, and explains what happens if things go off track. Add scope, deliverables, payment terms, confidentiality, IP ownership, and a neat dispute clause. It’s not about mistrust; it’s about clarity so everyone sleeps better.
Protecting the name, look, and ideas
Your name, logo, product design, or content can be the face of the whole company. A boutique owner I met built a following around a catchy brand but never filed a trademark. A bigger outfit registered the mark and forced a rebrand just as momentum was building. That one oversight cost new signage, packaging, web changes, and months of lost recognition. Quick check: search marks before you invest, file the ones you intend to use, and document original work. Trademarks flag your brand, copyrights shield creative work, and patents—when relevant—lock down inventions. Think of this as putting a lock on the front door of your hard work.
Hiring: a milestone with strings attached
Bringing on your first employee feels like a turning point. Along with the high-five moment come rules around pay, overtime, safety, and fair treatment. Here’s where many young teams trip: classifying a person as a contractor when the law views them as an employee. It seems easier on day one, then later turns into back pay, taxes, penalties, and stress. A short checklist helps: who controls the work, who supplies tools, how permanent the relationship is, and whether the person is part of the core service you sell. Get this right early and you avoid a common pitfall.
Taxes: the habit that saves headaches
No one wakes up excited to reconcile receipts, yet clean books are the difference between a calm spring and a panicked one. A simple rule that solves a lot: separate the money. Open a business account, get a card for business expenses, and record income and costs as they happen. Mixing grocery runs with vendor payments creates tangle upon tangle at tax time and can erode the very protection you formed an LLC or corporation to gain. Set reminders for payroll filings, sales tax deadlines, and quarterly estimates. Small, steady habits beat big cleanups every time.
Insurance: small line item, big rescue
Now and then, the rare event knocks on the door. A client slips in your studio, a delivery driver backs into your rented space, a laptop with sensitive client files vanishes from a café. The day you need coverage is the day you’ll be glad you bought it. General liability handles accidents, professional liability speaks to service mistakes, property coverage protects gear, and workers’ comp becomes a must once you have a team. A short call with a broker who knows your industry can surface gaps you didn’t notice.
Disputes: plan for peace before trouble
Even careful teams run into conflict—late payments, missing shipments, work that doesn’t match the spec. A good contract already gives you tools, and a simple ladder helps: talk it out fast, escalate to a written plan, then consider mediation or arbitration before you think court. Speed matters. Silence lets frustration harden into something bigger. Quick outreach framed around facts—what was promised, what happened, what fix is fair—keeps both sides focused on a result, not a feud.
Ongoing compliance: the quiet rhythm
Here’s a truth that catches people off guard: the legal work doesn’t end after launch day. States expect annual reports; agencies expect renewals; your records need to stay tidy. I spoke with an owner who skipped a few annual filings, and the state quietly dissolved the company. Reinstatement took time, money, and lots of apologetic emails to vendors. A recurring task list, a shared calendar, and one place to store receipts, contracts, and approvals keep you ahead of surprises.
Common slip-ups to sidestep
A short roundup helps anchor all of this:
• Using business funds like personal cash.
• Copying a random contract instead of adapting one to your deal.
• Skipping brand checks and trademark filings.
• Treating insurance as optional.
• Calling core workers “contractors” to save on paperwork.
Each of these shows up again and again in real stories—and each one is avoidable with a small upfront step.
Why legal help earns its keep
Plenty of founders try the DIY route for everything at the start. Fair enough—money is tight. Then a lease clause bites, or a contractor dispute escalates, or a filing window closes. A short consult can steer you around known potholes and set up templates you’ll reuse. Think of it as paying for a map before a road trip: you still drive, you just skip the dead ends.
Pulling it all together
So, what’s the takeaway as you get ready to open doors, launch a site, or sign that first customer? Dream big, and then protect the dream with a few steady habits. Pick the right structure, file what needs filing, write down the promises, shield your brand, keep the books clean, and insure the parts that could sink the ship. Add a rhythm for renewals and reports, and you’ll feel the pressure ease. Step by step, the legal noise turns into background hum—and your best energy can go back to building the thing you actually set out to build.