JOBS Act Means More Entrepreneurs in the Market for Small Business Attorneys
Back in April, President Obama and Congress passed legislation that was designed to support new business start-ups and small business growth.
Our Chicago business attorneys know that the Jumpstart Our Business Starts (JOBS) Act eases federal regulations on obtaining start-up funds and grants individuals the right to be investors. This means that numerous new businesses have been cropping up, and many more are hoping to take advantage of the incentives made available by this measure.
The law, which fully goes into effect in January 2013, allows a company to raise as much as $1 million annually from individual investors. Plus, individual investors whose annual income or net worth is less than $100,000 are allowed to invest up to $2,000 or 5 percent of their income (whichever is higher) in new business. Anyone whose income or net worth is higher than $100,000 can invest up to 10 percent of their annual income.
An estimated 6.8 million new businesses are born each year in the U.S., which averages out to about 565,000 a month. Many of those are in larger cities, like Chicago.
With crowdfunding platforms like Kickstarter and Fundable now making start-up costs more manageable, along with seismic changes in the implementation and use of social media, entrepreneurs can now directly mass-market to potential clients in a way never before possible.
We understand that starting a new business is an exciting venture, but you want to make sure not to overlook some of the legal and tax basics.
The three main considerations are:
- Protecting your idea and your brand;
- Choosing a legal structure;
- Filing proper taxes.
That said, failing to hire an attorney at all can be a fatal flaw in your new business plan because what you don't want is for your company to be faced with failure before it even gets off the ground.
For example, if you don't secure certain patents and copyrights, you may not be entitled to an injunction or compensation if another person or company tries to rip off your idea. Or, you might be setting yourself up for major tax liabilities if you set up the wrong kind of legal structure - say a corporation versus an LLC. If you're working from a home office, the legalities may be different than if you will be operating out of an actual storefront location.
If you do intend to lease a property, you will need an attorney to review the terms of that agreement to ensure it's fair and equitable.
And you would think something as simple as naming your business would be relatively easy. But having an attorney do some research for you can help you avoid an embarrassing and potentially damaging situation of having to change it later if you get a cease and desist letter from another company with the same or a similar name. You may also need to register that name with certain local, state or federal agencies and you may need to obtain certain permits, depending on the type of business.
By allowing your small business attorney to handle the formalities, you have the opportunity to focus on growing the business and living your dream.
Jeremy A. Gibson & Associates is a law firm dedicated to business litigation in Chicago and elsewhere in Illinois. Call 877-452-4529 for a free consultation.
The JOBS Act: What Startups and Small Businesses Need to Know [Infographic], Sept. 21, 2012, By Jamie Farrell, Forbes Magazine