Do you want to know the legal requirements you need to starting a consulting firm? If YES, here is a checklist of consulting business licenses, permits & insurance.
Having provided you with a:
- Consulting Industry Overview
- Market Research and Feasibility
- Consulting Business Plan
- Consulting Firm Marketing Plan
- Consulting Firm Name ideas
- Cost of Starting a Consulting Firm
- Consulting Business Licenses and Permits
- Consulting Firm Marketing ideas
We will consider what it takes to get operating license and permit for your consulting business including insurance coverage and intellectual property protection.
Starting a Consulting Firm – Licenses, Permits & Insurance
- Best Legal Entity to Use for a Consulting Business
There are several legal entities that you can choose to use, however, there are some that are best. Starting a consulting firm is indeed a serious business, so the legal entity you choose will go a long way to determine how big you want the business to grow.
It is also no doubt choosing a legal entity for a business come be a bit challenging. When it comes to choosing a legal entity for your consulting firm, you have the option of choosing general partnership, a limited partnership, an LLC, a “C” corporation, or an “S” corporation.
It is important to clearly state that these different forms of legal structure for business has its own advantages and disadvantages; which is why you must weigh your options properly before making your choice. These are some of the factors you should consider before choosing a legal entity for your consulting business; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and of course taxes.
If you take your time to critically study the various legal entities to use for your consulting business, you will agree that limited liability company; an LLC is most suitable. You can start your consulting business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or a ‘S’ corporations especially when you have the plans of going public.
Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your consulting business so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company; you will enjoy flexibility in ownership and in your management structures.
Is Professional Certification Required to Start a Consulting Firm?
Professional Certification is one of the main reasons why most consultants and consulting firms stand out. If you want to make impact as in the consulting industry, you should work towards acquiring all the needed certifications in your area of specialization.
You are strongly encouraged to pursue professional certifications; it will go a long way to show your commitment towards the business. These are some of the certifications you can work towards achieving if you want to run your own consulting firm;
- The Certified Management Consultant™ (CMC®) certification
- Business Consultant Certification / Certified Business Consultants (CBC®)
- Professional Development Certificate in Management Consulting
Please note that the higher your qualifications and experience (expertise), the easier it is for you to secure contracts as a consultant.
List of Legal Documents You Need to Run a Consulting Firm
These are some of the basic legal document that you are expected to have in place if you want to run your own consulting business in the United States of America;
- Certificate of Incorporation
- Business License
- Business Plan
- Non – disclosure Agreement
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Consulting contract documents
Getting Insurance Policies for your Consulting Firm
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance that is required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best insurance policies for your consulting business.
One of the reasons why it pays to have a solid insurance in place for your business is because of the fact that it saves you a lot of heart ache, should a bad situation befall your consulting business. Here are some of the basic insurance covers that you should consider purchasing if you want to start your own consulting business in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Workers compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
Getting Intellectual Property Protection for your Consulting Firm
Consulting business is about advising and creating solutions for organizations and individuals; in most cases, you are expected to develop a document, guide or training modules. Of course you won’t want other organizations to make use of your brain – child without paying for it hence the need to secure an intellectual property protection for your job.
One thing about consulting business is that you can design a solution – document for an organization, and the document can be useful to other organizations. With a little tweak, you can sell the solution to as many organizations that are willing to pay for it. Why is this important? It is of essence because you are able to drag those who have trespassed, when they are caught. Also, this way others can steer clear using your brainchild for free and without your permission.