Starting a Business? Legal Basics Easy-Guide for First-Time Solopreneurs and Freelancers
Imagine this:
You’re at your favorite coffee shop, laptop open, coffee looking picture-perfect beside you, and you’re vibrating with energy as you map out all of the many ideas of your business idea that’s been tugging at your intuition now for months. It’s finally time, you can feel it!
You’re over people trying to sell you quick wins or flashy trends. You’re building something real. Something meaningful. Something that lets you do work you love, make an impact, and finally step away from the day job that doesn’t light you up.
If you’re thinking “Fuckkkk… this is me!” Welcome, honey. You’re gonna love it here!
Then…the overwhelm of legal questions start swirling. LLC or sole proprietorship? Contracts? Taxes? It all feels overwhelming, and you wonder if you’re even ready to make that step or just put it off for now.
This guide was created just for you! Let’s dive in.
Why Your Story Matters (and Why You’re Not Like Everyone Else)
You’re ambitious, determined, and a little bit of a black sheep. You don’t want the glitz, hype, or empty promises of “overnight success.” You want a business that’s simple, sustainable, and true to you. You want a business that gives you financial stability and lets you make a difference on your own terms. You believe in doing things differently, and you’re willing to put in the work for the long haul.
Which is why your legal foundation matters. No, it’s not glamorous, but that foundation will help you build that exact business and life you’re working toward, without the rocky, unstable cliffs of hoping you can just worry about it all later. Diving in now, without the overwhelm, is how you’ll start off strong!
Legal Basics Easy-Guide for First-Time Solopreneurs and Freelancers
Step 1: Choose the Right Business Structure
Your business legal structure should be the safe, sturdy foundation for your new business to grow and thrive on.
For most first-time solopreneurs and freelancers, there are typically three main legal structures to choose from:
Sole Proprietorship: This is as simple as you can get. In some US states, you don’t even need to file anything as a Sole Proprietor – you just simply are. However, it’s important to note that in this structure, your personal and business assets are one and the same. Because of this, this structure doesn’t offer you much protection or safety IF something were to happen.
LLC (Limited Liability Company): Personally, I would say that the majority of small businesses, new and existing, fall under this structure. Unlike a Sole Proprietor, filing as an LLC offers you the protection that your business and personal assets are separated, as long as you also separate them by use of personal and business bank accounts, credit cards, etc. Typically, filing an LLC is fairly simple and in-expensive, although some states are more expensive to file – check with your Secretary of State website for the state specific requirements for becoming an LLC.
S Corporation or Corporation: For us Solopreneurs and Freelancers, you probably don’t have to worry about filing as a Corporation until your business grows, and even then, you may decide to remain an LLC. While S Corps are more complex, this structure does offer strong liability protection and potential tax benefits as your revenue and business expands. This will be an important conversation to have with your accountant as your business grows so they can help advise you on what will be best for your business.
For most, an LLC may be the best starting point. As an added tip, many attorneys offer a free consultation call to ask them questions as you’re considering the best option for your business.
Step 2: Register Your Business Name
Here’s the deal about business names. If you’re just getting started and you don’t have an idea for your business name, it’s ok to take some time to figure this out. As a freelancer, you may decide to use your name – I too, have Danielle Uhl, LLC. However, depending on your business goals, you may want to create a business name that is separate from you.
Either way, it’s important to do a bit of research to see what comes up on the initial Google Search, as well as potential trade names and trademarks. Ideally, you want a name that isn’t taken, registered, or highly confused with another business out there, especially in your own state. For example, if a celebrity, author, or influencer also shares your name, it’s likely they will get found and your business will not. Even worse, if you decide on a business name that’s already trademarked by someone else, you will be asked to change it, if not, threatened to be sued for trademark infringement. Do your research, first.
Once you’ve decided, you can file your LLC under that name, or DBA (“Doing Business As”). If the name is central to your brand and story, you might consider trademarking your name or logo for extra protection.
Step 3: Get Your EIN (Employer Identification Number)
Even as a solopreneur or freelancer, an EIN is essential for opening a business bank account, filing taxes, and hiring down the road. It’s free and easy to get from the IRS. Plus, if you’ve ever been the victim of identity theft, an EIN gives you more protection – trust me.
Step 4: Secure Necessary Licenses and Permits
Depending on your business type and location, you may or may not need a local, state, or federal license for your business. Check your city and state websites to make sure you’re covered. You might also consult with your local small business Chamber of Commerce or SBA (Small Business Association) to get specific advice for what your business might require.
Step 5: Separate Your Money
Using your LLC (or business structure) filing and EIN, open a dedicated business bank account. Remember, this isn’t just about bookkeeping, but works with your business structure to provide protection and separation of your personal and business assets. You need to keep them separate to keep them protected. As you’re growing, I would also personally recommend considering opening a business credit card to start building credit for your business.
Step 6: Use Contracts for Every Client and Project
Believe me, I know contracts can sound daunting, but they are SO with it. Yes, even if you are working with a friend or family member, use a contract, even a super simple one. The purpose of a great contract is to protect you and the client, and outline expectations, communication, and work-related details. Plus, a great contract also helps you quickly establish trust, professionalism, and value with your clients, especially as a new business.
I’ve partnered with The Legalpreneur to give you the most affordable access to attorney-drafted, industry-specific contract templates and legal support for your small business.
Step 7: Protect Your Business with Insurance
Much like business licences and permits, depending on your specific business, you may also consider general liability, professional liability insurance, equipment insurance, etc. If your business requires specific equipment for your business to operate (photographers, videographers, musicians, etc.), it’s a good idea to look into equipment insurance. If you're working with clients or offering advice (coaching, consulting, advisor, etc.), it’s a good idea to look into liability insurance. Overall, the more protected you and your business can be, the more peace of mind you’ll have to focus on your clients, growth, and your bigger vision.
Step 8: Annual Compliance and Growth Check-Ins
You might be secretly wishing that getting the legal side to your business set up is a one-and-done type task that you’ll never have to worry about again. But rather than thinking of the legal side as a pain-in-your-side, remember that the legal protection actually helps your business grow! Make it an annual business practice to do a legal check in. Go to your favorite coffee shop, order an extra tasty treat with your coffee, and use this check in time to feel like the legit Solopreneur you are!
Mark your calendar to file your periodic reports for your LLC or business structure, license renewals, tax deadlines, etc. Audit your contracts and make any necessary updates, additions, and increases on necessary fees related to your business and services. Because the two go hand-in-hand, I also like to use this time to evaluate my prices for the new year and update my contracts and marketing materials with the new pricing. Make this your annual CEO (or Boss-Ass-Bitch) Day!
You Don’t Have to Do It Alone
You’re not here for gimmicks or clickbait. You want support that’s real, affordable, and built for entrepreneurs like you. While I can’t offer legal advice (disclaimer!), that’s exactly why I partnered with and recommend Legalpreneur – the go-to legal resource for small business owners and freelancers. Their membership gives you access to the legal help you need, from LLC formation to contracts and intellectual property, without the overwhelm or sticker shock.
I know you’re not just starting a business. You’re saying yes to your dream, and making an impact on your terms. The legal stuff? It’s not daunting – you’ve got this. It’s just part of building the real foundation of your dream to your larger vision!
Ready to Build the Business You Dream Of?
You’re not here for shortcuts or empty promises. You’re here to make an impact, create financial stability, and do work that lights you up.
But you don’t have to figure it all out on your own.
If you’re ready for step-by-step support, without the overwhelm, the gimmicks, or the noise, I made this exactly for you (the exact course and tools I wish I had when I was first getting started)!
Inside the #WATCHME®: Start Your Own Business, you’ll get:
A clear, actionable roadmap for launching your business confidently
Real, practical guidance (no hype, no clickbait, no false promises)
Done-for-you tools, templates, and resources to help you set up your business the right way from day one
Community and encouragement from fellow big-hearted solopreneurs who get you
You deserve to build a business that fits your vision – a sustainable, simple, and true-to-you business. I invite you to join me. Take the next step and want a trusted guide to help you Start Your Own Business.
And if you know another visionary or (over)achiever who’s ready to dive in too, share this guide with them. Let’s build a new wave of businesses that matter – no shortcuts, just real, lasting success!
You’ve got this. And I’m cheering you on every step of the way.
Disclaimer: I am not an attorney, and the information provided in this blog post is for general informational purposes only. Nothing in this post should be considered legal advice. You should consult with a qualified attorney for advice regarding your individual situation. Reliance on any information in this post is at your own risk
