The most expensive legal problems in a new business usually start as questions nobody asked. When we sit down with owners after something has gone wrong, we hear the same refrain: "I wish I'd known to ask about that before I started."Here are five of those questions, and why each one is worth an hour of a lawyer's time before you open your doors.

1. "Does my LLC actually protect me, and how could I lose that protection?"

Forming an LLC or corporation is an important first step, but it is not a force field. How you run the business afterward matters as much as the paperwork you filed.Owners most often weaken their own protection by:

• Mixing personal and business money in the same accounts
• Starting the business with too little capital to cover foreseeable obligations
• Signing contracts in their own name instead of the company's
• Personally guaranteeing the lease, the bank loan, or the line of credit

That last one surprises people most. A personal guarantee makes you individually responsible for that debt, no matter how carefully you formed the company. Some guarantees can be limited or negotiated, but only if you raise it before you sign.

2. "What happens if my co-founder and I split up, or one of us dies?"

Many partnerships start on a handshake and trust. That works until a partner wants out, stops pulling their weight, gets divorced, or passes away. Without a written agreement, state default rules decide, and those rules rarely match what the founders would have chosen.A well-drafted operating agreement or partnership agreement should answer:

• How a departing owner's share is valued and paid out
• Whether founders earn their ownership over time (vesting) or own it all on day one
• How decisions get made, and what happens when owners deadlock, especially in a 50/50 split
• What happens to an owner's interest on death, disability, or divorce
• Who can sign contracts, borrow money, and access the bank accounts

These conversations are much easier, and much cheaper, while everyone still gets along.

3. "Do I actually own my name, my logo, and the work people did for me?"

Registering your business name with the state does not give you trademark rights in it. Owners sometimes spend years building a brand, then receive a cease-and-desist letter from a company that used a similar name first. A trademark clearance search before you print signs, build a website, or order inventory costs far less than a forced rebrand.The second surprise involves work you paid for. Many owners assume that if they paid a freelancer for a logo, website, or software, they own it. Under U.S. copyright law, that is often not automatically true for independent contractors. Without a written agreement assigning the rights to your company, the creator may still own the work.The fix is simple: get IP assignment language into your contractor agreements, and make sure each founder assigns to the company anything they created for the business before it was formed.

4. "What am I really agreeing to in this lease or contract?"

A commercial lease is often the largest financial commitment a new business makes, and it is usually drafted to favor the landlord. First-time owners tend to focus on monthly rent and miss the terms that cost more over time.Before signing a lease, look closely at:

• Personal guarantees, and whether they can be capped or phased out
• Common area maintenance (CAM) charges and other pass-through costs that can rise year to year
• Assignment and subletting limits, which can block you from selling the business later
• Relocation, renewal, and early-termination clauses
• Who pays for build-out and repairs

The same care applies to franchise agreements, equipment leases, software subscriptions, and vendor contracts. Auto-renewal provisions, exclusivity clauses, and one-sided termination rights are easy to miss and hard to undo.

5. "Should the people working for me be employees or contractors?"

Calling someone an independent contractor doesn't make them one. Government agencies and courts look at the actual working relationship, including how much control you have over when, where, and how the work is done. Getting it wrong can mean back payroll taxes, penalties, and unpaid overtime claims.Before your first hire, it's also worth asking:

• Which written policies and onboarding documents you need
• Whether a non-compete or non-solicitation agreement would actually be enforceable in your state, since the rules vary widely
• How to protect confidential information and client relationships when someone leaves

A short conversation before you hire is far cheaper than defending a wage claim after someone quits.

Ask before you sign, not after

None of these questions takes long to answer at the start. Each one can take months, and a lot of money, to fix later. If you're starting a business or realize you skipped some of these steps, Langer Law Group can help you put the right foundation in place. 

This article is for general informational purposes only and is not legal advice. Reading it does not create an attorney-client relationship. Laws vary by state and change over time, so consult an attorney about your specific situation.

Starting a business involves more than filing paperwork, and the order you do things in matters. Choose a name before checking trademarks, or sign a lease before your company exists, and you may spend months undoing it.Here is the sequence we walk our clients through, with the legal decisions that come up at each step.

Step 1: Test the idea and write a simple plan

Before spending money on formation and branding, make sure the business can work. A plan doesn't need to be a 40-page document. It should answer who your customers are, what you'll charge, what it will cost to get started, and how long you can operate before turning a profit.From a legal standpoint, this is also the time to ask whether your industry is regulated. Health care, food service, alcohol, child care, financial services, and construction, among others, often require licenses or approvals that affect your timeline and startup costs.

Step 2: Choose a business structure

Your structure affects your personal liability, your taxes, and how easily you can bring in partners or investors. The most common options are:

• Sole proprietorship or general partnership. Simple to start, but the owners are personally responsible for the business's debts.
• Limited liability company (LLC). Flexible and popular with small businesses. It offers liability protection and several tax options.
• Corporation. Often preferred by businesses planning to raise outside investment or issue stock to employees.

Licensed professionals such as lawyers, physicians, and accountants may face extra rules about which entity types they can use. Tax treatment is a separate choice from legal structure. An LLC, for example, can elect to be taxed as an S corporation, so involve your accountant in this decision too.

Step 3: Choose a name, and make sure you can use it

A name being available at the Secretary of State only means no other entity in that state is registered under it. It doesn't mean you can use it as a brand. Another business may already hold trademark rights to the same or a confusingly similar name.Before committing, run a trademark clearance search, check domain names and social media handles, and consider registering the trademark if the brand will be valuable. If you plan to operate under a name different from your entity's legal name, you'll generally need to file an assumed name ("DBA") certificate.

Step 4: Form the entity

In Texas, LLCs and corporations are created by filing a certificate of formation with the Secretary of State. You'll need to name a registered agent, a person or company with a Texas address who agrees to receive legal papers on the business's behalf.Form the entity before you sign a lease, open accounts, or take on customers. Contracts signed in your own name before the company exists can leave you personally responsible for them.

Step 5: Put the owners' agreement in writing

The state filing creates the company. The operating agreement (for an LLC) or bylaws and shareholder agreement (for a corporation) set the rules for how it runs. This is true even for a single-owner business, where the agreement helps show the company is separate from you.With more than one owner, the agreement should cover ownership percentages, who contributes what, how decisions are made, how deadlocks get resolved, and what happens when an owner leaves, becomes disabled, or dies. It's also the right moment to have each founder assign to the company any intellectual property they created for the business.

Step 6: Get an EIN and open a separate bank account

An Employer Identification Number (EIN) from the IRS is your business's federal tax ID. Most banks require one to open a business account, and you'll need it to hire employees. The IRS issues EINs free of charge.Once you have it, open a business bank account and run every business dollar through it. Keeping personal and business funds separate is one of the simplest ways to protect the liability shield your entity provides, and it makes bookkeeping and tax time far easier.

Step 7: Register for taxes and get your licenses and permits

Requirements depend on what you sell and where you operate. Common ones include:

• Sales and use tax permit from the Texas Comptroller, if you sell taxable goods or services
• Texas franchise tax registration and reporting, which applies to most LLCs and corporations
• Professional or occupational licenses for regulated fields
• City and county permits, such as certificates of occupancy, health permits, signage permits, and zoning approval for your location

Check zoning before you sign a lease. A space that isn't zoned for your use can stall your opening indefinitely.

Step 8: Get your contracts and insurance in place

Before you open, have the core documents ready:

• Commercial lease, reviewed for personal guarantees, pass-through costs, and assignment limits
• Customer agreements or terms of service that set out payment terms, scope of work, and limits on your liability
• Contractor and vendor agreements, including IP assignment and confidentiality terms
• Website privacy policy and terms of use, if you collect customer information online

Insurance is your second layer of protection. Depending on your business, consider general liability, professional liability, property, cyber, and commercial auto coverage. An entity protects your personal assets; insurance protects the business's.

Step 9: Prepare to hire, and stay compliant

Before bringing on your first team member, decide whether they'll be an employee or an independent contractor. That decision turns on how the work is actually done, not on the title you choose. Employees also bring payroll tax withholding, new-hire reporting, and Texas unemployment tax registration. Texas lets most private employers decide whether to carry workers' compensation coverage, but opting out has real legal consequences, so make that choice deliberately.Starting the business is a one-time event; staying in good standing is ongoing. Keep a calendar for franchise tax reports, license renewals, permit renewals, and registered agent updates. Missing state filings can result in your entity losing its good standing or being forfeited.

Build it right from the start

Every business is different, and the right order and details depend on your industry, your partners, and your plans for growth. Langer Law Group helps new business owners work through each of these steps so they can focus on running the business. 

This article is for general informational purposes only and is not legal advice. Reading it does not create an attorney-client relationship. Laws, fees, and filing requirements change over time, so consult an attorney about your specific situation.