Whether you like it or not law is part of business, especially here in the United States. If you plan to be a success in business then you better get your act together when it comes to the legal side.

Start by becoming an entity…

Don’t try to do business under your personal name. It is dumb these days. I know plenty of people who operate as a Sole Proprietorship and who have foolishly for years. Instead, be smart and form a legal business entity such as an LLC, C or S Corporation. This separates you personally from your business. So in most cases if your business is sued for something then all of your personal assets are safe from judgments.

Different states have different laws, policies, etc when it comes to business entities. In the U.S. you are able to form your corporation in another state than which you live or even do business in. Some experts recommend Nevada or Delaware due to some advantages in how they operate, more anonymity and tax advantages for example.

Hiring a good attorney to create a business entity usually costs around $1,000 to $1,500+ depending on the circumstances but it is totally worth it. There are some decent online incorporation sources that will do it for less but you may not get as customized of a solution that your business requires. If you are completely strapped for cash and are starting up from almost nothing then don’t let that stop you from doing business. Just start by filing a DBA license (doing business as) in your personal name with your county clerk and then create a separate business entity as soon as you can.

Don’t forget to properly maintain your business entity with the necessary paperwork. If you don’t then you run the risk of a judge declaring it a hobby business and pinning liability on you personally.

There can also be further tax advantages as a result of being incorporated that you would otherwise not have access to.