A colleague and I have a startup idea. We are currently writing a business plan and applying for patents. What kind of business license do we need to apply for? Currently we don't have any income or any expenses. We do feel we have IP that needs to be protected hence the patents and nda's. The last issue, my business partner lives in Ann Arbor, MI. Does it matter where I apply for the license? As we begin to fund the company, incur expenses, etc. are there any tax implications that we need to take into consideration?
3 Answers from Attorneys
You need a lawyer. You are facing a bunch of legal issues, and this is just from your own words. E.g., (w/o saying these are all of them), your entity (partnership, LLC, sub S, etc.), patent (you're not thinking of doing this yourself, w/o prior experience, are you?), intellectual property protection, and not least of all, the tax situation. You may need experts in several disciplines. If you would like to discuss, feel free to call me.
You need a lot of legal and accounting help (and if you cqannot afford it you should delay your business plan until you can). For patents you need an IP attorney. As to the format of a business with people in two states, you need a specialist in tax and corporate law, and also possibly a CPA. This frankly isn't something for just any lawyer, andyou should not hire a general practitioner such as myself and the other lawyer responding here. The legal and accounting steps must be decided before you do anything else.
As stated above, you have numerous legal and tax issues to discuss. In an attempt to provide some guidance: 1) you will need a local business license, but you should also form a corporation or an LLC under state where the business will be primarily run; 2) you will need an intellectual property attorney to first determine whether you have a patentable invention and, if so, filing for the patent; and 3) you will need a good tax advisor who is experienced in representing businesses with owners in differing states.
If you would like to discuss any issues further, please feel free to contact my office. The link to my contact information is below. Thank you.
The foregoing is general information only, not specific legal advice. No attorney/client relation has been created or should be implied.
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