Small business owners are known for their optimism and desire to get things done here and now. While trying to move fast is often a good thing, there are times where moving too fast will cause problems that cost time and money to solve.
Many states, cities, and counties require businesses to pay a registration fee or get some sort of permit. These requirements are often not known to common people without a legal or accounting background.
Usually, it’s a simple matter of paying a small fee and filling out a form just so that the local government knows who you are and who to contact if citizens file a complaint. However, if you don’t do it, you could be hit with hefty fines or even possible criminal charges.
Hiring Independent Contractors
Business owners may think hiring an independent contractor means less taxes and less paperwork. Making someone an independent contractor instead of an employee just for those reasons is a mistake.
There are very strict rules regarding when a worker is an independent contractor and when he/she is an employee. This leaves very few types of jobs where it’s actually possible to have a real choice between hiring someone as a contractor or employee.
If you can’t legally do this but still decide to proceed hoping that no one notices… Well, this decision can backfire. Expect to pay back taxes for payroll withholding plus interest and penalties. You may also face penalties for things like failing to pay into workers’ compensation.
Skipping Trademark Registration
Have a great idea for a business name or a splashy logo? Make sure you put it on paper.
Trademark registration costs money and can take time, so some business owners try to skip it. However, if you don’t register your trademark, you run a risk that someone else tires to use your idea.
In some countries, the first person using a trademark gets common-law rights without filing for a trademark officially, you must not to rely on this. It can be very difficult to prove who was actually first. This is especially true if the person who stole your idea files a trademark before you.
You basically have two options. One is risking spending a lot of time and money hiring a lawyer and going to court to protect your trademark. The other is being proactive and filing a trademark registration to protect your rights now.
More information about trademark searching and registration here.
