A retail outlet is one of the easiest businesses to open, whether it’s a physical store or an eCommerce site. As such, many people dream of running their own store and becoming a successful business owner, whether locally, nationally or on a global scale.
With so much help and guidance available through Internet articles and online courses, becoming a retailer is more accessible than ever, especially for new entrepreneurs. However, there are several legal matters you need to be aware of before you can start selling. Here are five legal steps to take before you open your retail store.
Pick a Name
Choosing a name for your business might not sound like a legal matter, but there are trademark laws to be aware of. Before you start printing business cards, make sure you’re permitted to use the name you’ve chosen. You can find out online whether the name you want is already in use where you live by checking business names registered with the Secretary of State. You should also conduct a free trademark search to see if your name is available for use in all 50 states.
Choose a Legal Structure
While your retail business is still in the planning stages, you need to choose a legal structure for your store. The most common arrangement for small retail businesses is an LLC (Limited Liability Company). This is the most straightforward structure to use, and it’s the best option for those who want to avoid some of the legal formalities. You should also incorporate to protect yourself in case your business does not take off as planned.
Abide By MSRP
If you’re selling goods manufactured elsewhere, you need to make sure you’re not selling too far below MSRP (Manufacturer’s Suggested Retail Price). You also need to follow the MAP (Minimum Advertised Pricing) law, which applies to the price you advertise your products at online or in store. If you want to know more about MAP and MSRP laws, you should find an internet lawyer to review MAP policy for your business. These laws apply whether you advertise online or in print, and are required by online stores as well as bricks-and-mortar businesses.
File for an EIN
An EIN (Employer Identification Number) is a legal requirement for those who plan to hire employees to work in their business. It is also known as a Federal Identity Number as it is used to identify a business entity. It’s easy to file for an EIN online, but you must have a valid Taxpayer Identification Number before you apply.
Apply for Business Licenses and Permits
The business licenses and permits you need to open your store depend on which city and state you live in, and it’s a good idea to get in the know while your business is still in the planning stages. Consider hiring a lawyer and an accountant to help you understand what laws and tax rules apply to retail stores in your state.