4 Key Tips for Legally Protecting Your Business

Image for 4 Key Tips for Legally Protecting Your Business

This article originally appeared on Corpnet and has been republished with permission. 

Starting a business requires some seriously hard work. When investing serious amounts of time and money (not to mention blood, sweat, and tears), the last thing you need is to have it slip away because you didn’t take measures to protect it legally.

I see far too many business owners open themselves to risk by not educating themselves about what it takes to run their businesses legally and safeguard them from the carelessness or ill will of others.

What can you do to protect your business? Below is a list of things to pay attention to:

awesome job post


Distinguishing you from your competitors, your business name will be one of your most valuable assets.  Before you spend a lot of money printing it on business cards and marketing materials, check to make sure the name you want to use is legally available to use. I recommend:

After you’ve determined your business name hasn’t been taken by another company, you will need to register it in the state where you’ll run your business. Registering your name allows you to operate your business under that name in the state legally, and it ensures no other business can use your name in your state.

If you conduct business as a sole proprietor and will use a name other than your full personal name (e.g., Jill’s Graphic Design vs. Jill Smith’s Graphic Design), you must file a Doing Business As (DBA, also called a “fictitious name”).    

When forming a Limited Liability Company (LLC) or incorporating your business, that process automatically registers your name with your state.


I mentioned forming an LLC or setting up your business as a corporation will register its name, but establishing a business structure also provides other significant benefits. Liability protection is a big one. If you don’t formally apply for a business structure, then your business will by default operate as a sole proprietor (single owner) or general partnership (multiple owners). While these structures demand fewer compliance requirements, they don’t offer liability protection of the owner’s personal assets.

An LLC and corporation, on the other hand, establishes your business as an entity separate from you the owner. Your personal assets and liabilities are independent of those of your business. So, in the event your business can’t pay its bills or gets sued by a client, your personal bank account, home, retirement funds, etc. will have some protection.

3. Get The Required Licenses And Permits

Some types of businesses need to get state and local licenses and permits—and the requirements can vary from state to state and county to county. Examples of the requirements some businesses need to legally operate include state sales tax licenses, food/beverage licenses, zoning permits, health licenses, etc. Contact your state, county, and local municipality offices to find out what your business needs to have in place before doing business.


When working with a sub-contractor, vendor, project partner, or others, your business has private information worth protecting. A non-disclosure agreement (NDA) will help ensure the safety of sensitive information (such as customer lists, financial data, trade secrets, new product plans, etc.). NDAs are designed to ensure people privy to your confidential information keep it “in house.”

A typical NDA should include the following elements:

  • Protected Information – Explaining what information others should treat as confidential, so the other party is aware of what they need to handle with care.
  • Timeframe – Specifying how long the information should stay confidential. NDAs do not typically last for eternity. Some last for the duration of a project, while others might extend three or five years or some other length of time.
  • Obligations – Describing what the other party can or can’t do with the protected information. Most NDAs state that confidential information may not be revealed to anyone outside of the company, but under certain circumstances, you may want to allow a sub-contactor, vendor, or partner to disclose information. You’ll want to describe the nature of those situations.   
  • What Happens If A Breach Occurs – Disclosing the damages you’re entitled to if the other party violates the terms of the NDA.
  • Method of Resolution – Defining how a dispute should be resolved in the event of a breach or disagreement regarding the NDA. For example, who will pay for attorney fees and will arbitration be used?

While NDAs can’t guarantee someone won’t steal or misuse your sensitive information, they do give you a legal leg to stand on. Fortunately, they’re quite easy to produce. You can find templates online (such as those on Upcounsel’s website) to use as a starting point and then adapt them to your needs. As with any document carrying legal significance, I recommend asking an attorney to review it to make sure it will meet your specific needs appropriately.  

All that I’ve mentioned here will hopefully give you some understanding of what you can do to protect the business you’re working so hard to build. Realize, however, no business has the same needs. To understand the breadth of legal considerations you should pay attention to (some businesses have more, and some have less to deal with), I encourage you to talk with a legal professional as you work through the startup process.

This story was submitted by Nellie Akalp and does not constitute the views or opinions of Upwork.

Upwork is a freelancing marketplace where businesses of all sizes can find talented professionals across multiple disciplines and categories. If you are a business and are looking to get projects done, consider signing up!

Join Upwork
Nellie Akalp

by - CEO @corpnetnellie

Nellie is the founder & CEO of CorpNet.com, an online legal document filing service, where she helps entrepreneurs start a business, Incorporate, Form an LLC,… more