35

Failure to Obtain a Seller's Permit

Why This Mistake Will Hurt Your Business:

Without a seller’s permit, you won’t be able to collect sales tax where states require that you do. However, if the state won’t let you collect sales tax, you will still be liable to pay them. As a result, you’ll actually be paying sales tax out of your own pocket.

34

Failure to File Annual Report for Your LLC or Corporation When Required by Your State

33

Failure to Physically and Legally Protect Confidential Information When Sharing with Others

Why This Mistake Will Hurt Your Business:

Similar to Mistake #31, you have to do all these things to ensure your information remains a trade secret. But in this post we give you the exact tips you need to follow to maintain your trade secret status.

Related mistakes : Failure to Use NDA
32

Failure to File and Pay for Sales Tax

Why This Mistake Will Hurt Your Business:

Failing to pay sales taxes could result in you having to pay all the uncollected sales taxes--this could easily make most businesses insolvent. Also, you might have to pay interest. And there’s possible criminal implications.

31

Failure to Prepare a Proper NDA When Dealing with Third Parties

Why This Mistake Will Hurt Your Business:

If you share confidential info without an NDA, the information can immediately lose all its value. Its value was as a trade secret. And information that’s not confidential can’t be a trade secret.

30

Failure to Pay Employment or Unemployment Taxes

Why This Mistake Will Hurt Your Business:

Compounded interest. Failure to comply with these taxes over an extended period can cause you to get hit with a huge tax bill. Also, you could incur fines. And in a worst-case scenario, be prosecuted criminally.

29

Failure to Obtain a D/B/A

Why This Mistake Will Hurt Your Business:

If you’re operating your business under a different name than your own or the entity’s name--without a d/b/a--you could incur penalties ranging from a small fine, inability to enforce contracts, to actual criminal charges.

28

Failure to Obtain Proper Public Safety Requirements, Like Health, Fire, Building, and Zoning

Why This Mistake Will Hurt Your Business:

Failing to have the proper public safety requirements could shut down your business. But of course, chances are if you need one of these, you know about it.

27

Failure to File for Proper Local Licenses

Why This Mistake Will Hurt Your Business:

Not having the right licenses could vary from being something like a $50 fine to something that closes down your business. Usually the failure to have business licenses won’t ruin you, but -- it’s not worth the risk.

26

Failure to File for the Proper State Licenses (Less Common, but Could Apply to Niche Businesses Especially)

25

Failure to File for Correct Federal Licenses

Why This Mistake Will Hurt Your Business:

Violating federal laws would be a disaster for your business. Just imagine if you created a product and had to trash the entire order because it didn’t comply with some law you didn’t know about.

24

Failure to Get an EIN or Fill It out Correctly

Why This Mistake Will Hurt Your Business:

It’s not as much about “getting the EIN” as it is ensuring you’re paying all the right taxes. But usually, getting the EIN is the first step in that process.

23

Failure to Indicate How to Amend Your Company Agreements (including Operating Agreement or Other Inter-Company Contracts)

22

Failure to Have a Dissolution or Liquidation Provision

Why This Mistake Will Hurt Your Business:

You could have a falling out with another owner where they want to shut the business down unilaterally. And you might not be able to stop it without a provision requiring a certain vote percentage to do so.

21

Failure to Appoint a Reliable Registered for Your LLC, Corporation, or Nonprofit Corporation

20

Failure to Update Your Registered Agent Address, Which Later Results in a Lawsuit and You Don't Get the Documents

19

Waiting Too Long to Get All the Company's Agreements Written Down

Why This Mistake Will Hurt Your Business:

If you wait too long, then when you need the contract, it’s too late. No one’s soon-to-be ex-spouse is going to agree to a prenup when she’s about to get a divorce. And no one will agree to a contract after the conflict has already occurred.

18

Failure to Register as a Foreign Entity in Other States or Registering When You Didn't Need To

Why This Mistake Will Hurt Your Business:

If you don’t register when necessary, you could be hit with substantial back taxes, penalties, and not be able to sue anyone in that state that wronged your business. If you register unnecessarily, you’re paying way too much.

17

Failure to Do the Right Corporate Formalities for Your Company

Why This Mistake Will Hurt Your Business:

Corporate formalities are in part (1) required by law and also (2) great for proving who’s made what decisions. Without them, you could have no written proof of what everyone’s agreed to, and you could be subject to increased liability.

16

Failure to Conduct the Correct Post-Formation Legal Issues For Your Corporation

Why This Mistake Will Hurt Your Business:

Just like with LLCs, there’s probably hundreds of ways overlooking some of these mistakes could destroy your business. And corporations make the same 3 big mistakes regarding taxes, corporate formalities, and licenses and permits.

15

Failure to Conduct the Correct Post-Formation Legal Issues for Your LLC

Why This Mistake Will Hurt Your Business:

There’s probably hundreds of ways overlooking some of these mistakes could destroy your business. But the three biggest mistakes are overlooking specific taxes, forgetting corporate formalities, and not having the right licenses and permits.

0

Why Using Google for Legal Problems Will Kill Your Business

Why This Mistake Will Hurt Your Business:

It causes you to make avoidable legal mistakes. You might find legal answers for what you’re looking, but it’s the legal problems you never to knew search that often will destroy your business.

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