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Other Considerations > Name - Pg. 35

First Steps Licenses 35 If you plan to do business or maintain an office outside your state of organization, it may be nec- essary to register as a foreign entity with the secretary of state for each state in which you will be conducting business. Furthermore, check with local counsel to understand any tax obligations you may incur, such as income or sales taxes. If you will have employees in states other than that which you are organized, your company may be subject to withholding worker's compensation, and other labor regulations. Insurance Unfortunately, insurance has become very expensive in the last couple of years, leading some companies to "self-insure." "Self-insuring" should always be used in quotation marks because it is a somewhat ironic term: it refers to the practice of putting money into a reserve/rainy day fund rather than paying premiums to a third-party insurer. Of course, the risk is that if disaster strikes when there is not enough money in the reserve, there is no coverage. Even with the limited liability afforded by many corporate entities, insurance is a good idea because 1. 2. It protects the individuals working for the company against errors and omissions for which they would otherwise be personally liable. Insurance can be the difference between a company's survival and its failure in case of fire, unexpected departures of owners who need to be bought out, or other devastating occurren- ces. Don't expect investors to put money into a company with no limits to its exposure. Ask around for the name of a good insurance agent who works with other companies in the industry, and spend a bit of time with him explaining how your business operates. You should consider the following cov- erage: