Checklist for Starting a Business: So Many Things to Do So Little Time

Whether you are starting a small business or running an established company, it is vital to understand business laws and regulations. But that is easier said than done. My goal is to provide business-related legal services so that you can spend more time dealing with the actual business and less time with legal intricacies of operating your business. My services include:

Business formation

You have a new and innovative product or service and you are interested in forming a new business. You may have concerns about liability, taxes, investors and other considerations. As your small business lawyers, we will assist you in deciding whether your startup business should organize as a limited liability company (LLC), partnership, S corporation or C corporation. We will form the most appropriate business organization for your new business and register the business in all jurisdictions in which it will conduct business.

Mergers and acquisitions

If your business is fortunate to thrive and become a merger or acquisition target, we can represent you as the seller; or if you are on the other side and looking to acquire a business, we can assist with the due diligence in purchasing a business. We will review various approaches in purchasing a business through merger or acquisition. We will discuss with you various structures in purchasing the stock or purchasing the assets of an acquisition target. In either case, your business will need thoughtful and comprehensive representation in all aspects of a merger or acquisition.

Government contracting

Government contractors face numerous issues when contracting with the government. And with a hands-on approach and substantial experience, we will help you navigate those legal issues. We prepare teaming agreements, subcontracts and joint venture agreements and can handle a variety of other government contract matters. As government contract lawyers for your small business, we can assist you in applying for programs for HUBZones, service-disabled veteran-owned small businesses or women-owned businesses. If your company is facing debarment or suspension because of allegations of corruption or bribery, we can assist in your defense before the U.S. government or the World Bank.

Business transactions

Once you have an ongoing business, however organized, you will have a host of various commercial transactions. We prepare agreements with lenders, lessors, partners, customers, employees, and consultants. We provide business legal services for your company, preparing confidentiality agreements, nondisclosure agreements, licensing agreements, distribution, employment agreements, independent contractor agreements, lease agreements, and many others. We will help you understand what each part of these agreements require and make sure that these agreements provide protection to you and your business.

Corporate law

Once your startup business has been created, your company will have ongoing requirements to maintain its separate status. We will assist in guiding you on how to prepare corporate minutes or resolutions of the company to maintain the corporate form and other steps to protect the limited liability of your company. You will also have to make sure that your bylaws or operating agreement continues to reflect the needs of the business organization. We are available to assist you in addressing these issues. And once your company is ready to raise additional capital from investors, we can work with you to determine whether you are subject to securities laws or fall within one of the exemptions.

Business disputes

Few businesses are immune to business disputes. If your small business was well-advised, you have an agreement that will provide guideposts on how to resolve your business dispute. If you are unable to settle your dispute, you may have a dispute resolution mechanism such as mediation or arbitration in the agreement. An alternative dispute resolution mechanism such as arbitration or mediation generally can provide a relatively quick resolution of your business dispute. If not, then you may have to consider litigation. We handle business disputes, including pre-litigation matters, mediation, arbitration and litigation.

Anti-corruption compliance

Every company should have procedures and policies to minimize its exposure to allegations of corruption or bribery. An integrity compliance program (ICP) is essential for businesses doing work internationally for the United States government or work financed through one of the development banks. We can assist in reviewing or preparing an ICP to assure that is consistent with the anti-bribery and anti-corruption guidelines from the World Bank. If your company is facing debarment or suspension because of allegations of corruption or bribery, we can assist in your defense before the U.S. government or the World Bank.

Non-profit law

We work with organizations to obtain their tax exempt status under Section 501(c)(3) of the Internal Revenue Code. There have been recent changes to obtaining 501(c)(3) status and we have worked with organizations in submitting successful applications on the simplified track by filing a 1023-EZ and the more rigorous 1023 application for larger organizations. Nonprofits also face similar legal challenges to assure that they comply with business requirements and additional requirements to assure that they do not jeopardize their tax exempt status. As a law firm for nonprofits, we work with nonprofit organizations to guide them through these issues.

FAQ Small Business Attorney in DC

What is considered a small business?

Almost all our clients fall within the definition of small business/startup as determined by the Office of Advocacy of the U.S. Small Business Administration. Under this definition, a small business has fewer than 500 employees. Small businesses encompass about 99.9% of all business organizations in the United States.

Which industries do you serve as a small business attorney?

Most of our clients are service providers such as consulting companies, law firms, accounting and bookkeeping services, cybersecurity consultants, video production companies, and lobbyists, just to name a few. We also represent foreign and domestic manufacturers and software developers.

As a small business lawyer in DC, we represent some retail operations, such as bookstores and restaurants. We also represent numerous nonprofits with varying missions. Our government contractors clients hold various IDIQs (Indefinite Delivery, Indefinite quantity Contracts) and GSA schedules.

In which areas of the law does a small business or startup need legal assistance?

Most times, small businesses/startups need the services of outside general counsel. As outside general counsel for small businesses, we can handle most matters as a small business attorney that small businesses generally encounter. Usually, anything with the word agreement or contract is within our practice areas. This includes operating and shareholder agreements, which are used for small businesses and startups that are formalizing their relationships with their owners. Once a business is formed, then we prepare and review a host of other agreements, such as service agreements (which may be referred to as client agreements or consulting agreements), independent contractor agreements (which may be referred to as subcontracting agreements), employment agreements, teaming agreements, purchase and sale agreements, merger agreements, option agreements, license agreements, lease agreements, and the list goes on.

What factors should a small business and startup look for in retaining the services of a lawyer for small businesses?

With our extensive experience of working as a small business attorney in DC for decades now, background and experience should come right at the top of the list when looking for a small business lawyer. We think that accessibility and communication are essential for a successful relationship between an attorney and a client. Hourly rate is important but not as important as quality of service.

What kind of experience do you have in advising small businesses as an attorney?

Keith Rosten has not only legal experience but also business and practical experience that allows him to relate to the trials and tribulations of a small business owner. Keith has BigLaw experience before working for small and medium-sized businesses, first at his own law firm focused on small businesses and then with Berliner Corcoran & Rowe LLP.

Keith has substantial business experience. He received an MBA from the Tuck School at Dartmouth College. During his business studies, he worked on several group projects with small businesses, including a furniture manufacturer, a manufacturer of leak location precision equipment, real estate developer. After business school, Keith operated a successful real estate business in California and overcame numerous issues, such as asbestos abatement and underground storage tank remediation.

Keith worked as a legal adviser to a government contractor and was a legal adviser to a major initiative in Russia. Keith ran another small business, selling and marketing solar energy equipment. The business had an e-tailer component, hosted the largest solar energy forum online, and sold solar energy equipment to the government. Keith negotiated two GSA schedules for the business and obtained HUBZone certification for the business. Keith was also president of the Dartmouth Entrepreneurial Network – Washington, a networking organization for small businesses in the greater Washington, DC community.

Keith has also volunteered for Compass Pro Bono, working with local business professionals to conduct long-term consulting engagements for local nonprofits in fundraising, governance, and strategy.

With this breadth of legal and business experience, Keith is attuned to some of the challenges facing small businesses, which allows him to provide effective advice and guidance.

As a small business lawyer, do you take in-person meetings only?

Yes. We are located in downtown Washington DC and host many of our clients. For those clients who cannot come into our offices, we usually meet over Zoom or by telephone.

How do you charge for your services as a small business attorney?

We charge our clients based on hourly fees. We usually provide a budget of how much certain matters cost so that startups and small businesses know in advance the ballpark cost of the matter.

What if a client does not like our services?

Clients can terminate our services anytime if they don’t find it satisfactory.

Should my small business lawyer or startup lawyer be in the same state as me?

No, not always necessary and may depend on multiple factors. For example, though we are an expert small business lawyer in DC, we have also provided consultation to other cities’ clients.

Checklist for Starting a Business

You have designed an innovative product or developed a groundbreaking service that will change the face of your industry. You have written a business plan and just maybe you have gotten some of your friends or family to agree to invest in your new venture. You are exuding confidence that you are going to start reeling in the customers just as soon as you can open your doors for business. You are ready to start your business, but you are faced with numerous implementation challenges.

This blog post provides a checklist for starting a business. You will need to address each of these issues for your startup. At first, this checklist for starting a business may seem daunting, but if you take each issue in hand and work through your contacts and business associates, you may be able to resolve these issues more quickly. What you really want to do for your startup is to develop the many systems that will support your new business so that you have time and energy to focus on growing the business. I am going to mention each of these questions but not in any particular order of priority. You need to start making a list and attacking each of these implementation questions one at a time.

Find a small business attorney

A small business attorney will be able to provide advice and support on a number of issues that you will immediately face as a small business owner. I understand that many entrepreneurs starting out simply download a form, hoping that the form will meet the needs of their startup. That may be fine if there are no issues down the road. But if the business is successful then there will likely be issues with investors, with partners, with government agencies. The more complex the structure you want, the more assistance you will need. If you plan on a single member limited liability company that will have only one asset such as a piece of real property, the legal work necessary will be minimal. But if you have a startup with both inside and outside investors, you will likely need more legal support for startup formation.

Whether you retain the services of Rosten Law here in the District of Columbia, or another small business attorney, you will be well-advised to have good legal representation to guide you through the labyrinth of issues that your startup will face. You may want to review some of these issues that you will have to address under our business formation practice area, which discusses the issues in forming limited liability companies (LLCs), corporations and partnerships in DC and elsewhere, and our business transactions practice area, which discusses business legal services for small businesses.

Tax advisers can save you money

As you are about to develop the structure of your business, you will have to take into account the tax ramifications of various possible corporate structures. The structure may affect the individual investors in different ways, depending on whether they are active or passive investors, whether they are employed by the business, whether they are investing anything other than cash into the business, and other considerations. The best person to help guide you through the tax ramifications of starting your business is a tax adviser, who usually is an attorney or an accountant.

Business advisers: will they be compensated?

You may have business advisers who know something about the industry in which your new business will operate. Some startups have informal boards of advisors, who may or may not be compensated for their time and effort on behalf of the company. Other companies may create an outside board of directors to oversee the management of the company. An outside board of directors is very important in the governance of nonprofits. A limited liability company may also have a board, which may function under flexible rules and policies depending on the operating agreement.

Banks can be a new business’ friend

After you have formed your company, you will need to open a bank account. You should not open an account simply at the closest bank. Banking services can vary widely and not just in fees. Some banks are more suited than other banks to working with startups. You may have heard that banks are around to lend you money when you don’t need money and are not available if you should need money. Although that may be partially true, some banks are more flexible in dealing with startups than other banks. You should not expect that a bank will open an unsecured line of credit with a new business. Usually the bank will require a personal guarantee from one or more of the owners until the small business develops a credit history and has assets to pledge for a secured line of credit. Whether your startup is looking for a loan from a bank or a loan from investors, the small business owners should be prepared to provide personal guarantees. If you plan on taking funds over your website, then you will likely have to open a merchant account and you can hold this account either at your primary commercial bank or another bank.

Credit card for the business

You will likely have a corporate form under which you are doing business. This can be a partnership, limited liability company or corporation. To maintain the separateness of your business, you will have to maintain separate accounts, not personal accounts with your various vendors. This may be the lease that you will enter into for your business space or it could mean a separate business credit card. Many of the banks will offer you a credit card for your business, and most all of them will require a personal guarantee. The banks will issue the credit card under your personal social security number even though the card is for the business and has its own employer identification number (EIN). Some credit card companies will allow you to transfer a business card to someone else, such as a new business owner; others will require that the new business owner take out a new card. For many businesses, especially those without a loan from the Small Business Administration (SBA), the credit card may be the only form of credit that the business will initially have.

Bookkeeper: garbage in, garbage out

All bookkeepers are not created equal. Some entrepreneurs decide to do the books themselves and others will hire a bookkeeper. And once your business starts to grow, and depending on how many transactions you have, you may have to hire a full-time bookkeeper. You will also have to decide which accounting software program you plan on using for your business. The industry standard is QuickBooks but there are other competing programs such as Xero and Peachtree, each of which has its own advantages and disadvantages. Your bookkeeper may have his or her favorite, but you as the business owner will have to be comfortable using the software to generate management reports. Remember that the management team of a startup is responsible for understanding the financial information of the business; this is not the responsibility of the bookkeeper, although many bookkeepers may have strong views on how the business should be run. Once you are comfortable with the financial information that is available, then the bookkeeper can generate periodic reports for the management team and directors.

Space: where are the entrepreneurs going to spend those long days and nights in the office?

If you plan on opening your new business in your home or garage, then you may not need to worry about leasing space. But if you have a startup and need space, you are going to have to figure out quickly how much space you are going to need and for how long you are willing to enter into a lease agreement. Some startups look into an incubator such as 1776 here in Washington, D.C. for the initial phase of their growth. The incubator will generally provide space and resources. If you locate your business in a commercial space, then you will have to figure out and negotiate the length of the lease and other critical provisions. And as mentioned above, many landlords wary of dealing with new businesses will require a personal guarantee from one or more of the small business owners.

Insurance to allow the small business owner some piece of mind

Just as you would not drive a car without auto insurance, you shouldn’t run a business without insurance. There are many different kinds of insurance such as a general liability policy that will protect your small business in case someone has an accident on your premises. Most landlords will require evidence of your insurance and require that they be named as an additional insured. There is also directors and officers coverage to protect managers or your advisers from alleged wrongful acts. And don’t forget workers’ compensation insurance. One kind of insurance that is cheap and is often overlooked is an umbrella policy for the owners, just in case someone is able to pierce the corporate veil. Even though you may have some protection against liability because of the corporate form you choose, you still want to make sure that you are protected from events that may be beyond your control.

Information technology is more than just buying a couple of computers

You now have your new shiny office even purchased the furniture and equipment for your startup. That is a good start, but you now are faced with a number of IT issues. The easy part is ordering the computers, monitors and printers. You are going to be faced with a dizzying array of software solutions for sales and marketing, for bookkeeping (discussed above), for word processing and email software. You may have used Gmail for your personal email but may find that Outlook is a better solution for your business. The challenge is that many of these programs are now inter-connected and your decision to go with one solution may have an impact on your business for other software packages. And there is now the decision of whether you are going to keep all of your business’ documents and other files on the cloud. Are you planning on getting an internal server? If you have a website, where is the website going to be hosted? And each business will have those software packages that are germane to that industry. For example, if your business is dependent on sales, then you will want to consider custom relations management software.

Communications for your new business

All of the telephone companies now have various packages. Some of the telephone companies may be known for aggressive sales and passive customer service. The telephone company that you think is the worst may not be the worst when you switch to a new carrier. And switching carriers midstream is not an easy endeavor, especially even minor issues like migrating a telephone number to a new carrier can be a challenge. A major issue these days with improvements in technology is whether you want to have a voice over IP telephone (VOIP) or stick with a landline. There are advantages and disadvantages and cost considerations for both options.

Website issues for your startup

Every business these days has a website and the first thing your customers or business associates will do in whatever business you are in will be to look at your company website. You have already chosen a name for your startup that will not get you into trademark problems and you have reserved the URL (Uniform Resource Locator) that will direct people to your website.

Related article: Finding a Name for Your New Business

Developing a website may be as easy as buying a template and filling up the content with information about your startup. Or it may be a custom solution. You may develop your website in a number of different programming languages and each language has ramifications for the website. If your new small business will be selling products on the website, then you will have to have a shopping cart and you will have to maintain compliance with the Payment Card Industry Data Security Standard (PCI DSS). As you develop your website, unless you do it yourself, you will hire a web developer and do not forget to have a contract with the developer that defines what belongs to your new business and what belongs to the developer. Another important consideration for your website is to develop and post a security policy, privacy policy and terms of use. Finally, if you did not know what search engine optimization (SEO) was before, you will have to gain at least a basic knowledge of how to attract traffic to your startup’s website.

Human resources

If you and the other founders of your startup are the only employees, then your human resources challenges are substantially reduced. Nevertheless, as part of your business formation, you should have discussed how each of the founders will be compensated for his or her time, whether by way of a salary or deferred compensation, additional equity or a number of other solutions. Even the small startup generally will have to hire outside employees. You will have to consider who will do the payroll for the company, usually either an accountant, sometimes a bookkeeper, or one of the large payroll companies. And of course, like any good entrepreneur, you can take the responsibility yourself if you are doing the books, although usually your time is better spent on other endeavors in the new business. If your startup is employing new workers, you are going to have to determine how to compensate them, what are their benefits and development a human resources program. The startup will most certainly have to decide which individuals are employees and which are independent contractors (also known as 1099 employees). There are major ramifications for each and if you categorize your employees incorrectly, your business may be looking at an action from the U.S. Department of Labor for violation of the Fair Labor Standards Act (FLSA). Your startup should have at the very least a standard employment agreement or consulting agreement with confidentiality provisions. Your startup will need an employment handbook. Some companies also develop a company policy or procedure manual.

Focus on growing the business

Setting up the systems to support your business is not a sport for the short-winded. The entrepreneur is usually strapped for cash and there are not enough hours in the day to master each of these areas. Knowing what you need to tackle may make the journey less burdensome. But each of these issues is critical to get your startup up and running on a sound footing. And a final word of caution. This checklist for starting a business may not be exhaustive, but it provides some of the critical decisions that you as the entrepreneur will have to make to put your new business on firm ground.