If an individual has a great idea for a product or service, he or she may decide to start a small business in order to share that product and make a living. Some start businesses with family members, friends or co-workers, while others may decide to do everything on their own. Most start-ups have two things in common: some money to invest in the idea and a concept they are passionate about.
Building a Successful Business From the Start
With a great business idea and product, the next step is to determine how to form the business – a limited liability company (LLC), a corporation, a partnership or a sole proprietorship? Laws governing these businesses are very different and complex, and choosing the right one is essential to the future of the organization. Because the risks can be so high, there are ten reasons you should contact an attorney before choosing a business form.
- Taxes – Different business types are subject to different tax laws and requirements. An attorney can explain the different advantages and disadvantages to you to ensure that you are maximizing what you get from the government and minimizing what you pay.
- Conformity – Some business types are required by law to conform strictly to certain rules. If your business is operating incorrectly, it may be at risk, and an attorney can ensure that you are conforming to all the appropriate regulations.
- Contracts – As a business you are likely to have contracts with employees, investors and partners. You may also have contracts for services, supplies and retail space. If the contracts aren’t handled correctly, you may wind up in the middle of an unwanted lawsuit.
- Control – If you choose the wrong business entity, you may be required to use your personal assets to pay debts or settle lawsuits. An attorney can ensure that you have chosen the organizational structure that best suits your needs.
- Capital – In order to operate successfully, your business must keep adequate records, raise money and be fiscally responsible. Based on the entity you choose for your business, you may have different ways to make distributions and raise money.
- Liability – If you are personally responsible for your business, your personal assets are at stake any time there is an issue. Choosing the right business entity ensures that your personal life is kept separate from your professional one.
- Autonomy – When you choose the right business entity, you are subjected to the most beneficial regulations and laws for your organization that you may not even be aware of and that can help you make decisions.
- Entity Variety – There are five basic entities for businesses, but there are quite a few different options within these entities that an attorney can help you sort through.
- Permits, Licensing and Registering – Your business may be required to be state registered in order to be a licensed company depending on the entity you choose. You may also need permits and licensing that an attorney can help you obtain.
- Multi-State Businesses – Your business may meet regulations in one state but not another. If you are operating in multiple states, an attorney can help you guarantee that you are conforming in all of them.
Forming a business is more than taking an idea and running with it, and an attorney can handle all the tedious tasks while you turn your product into something every consumer will love.
Protect Your Future
If you have a great idea and the money to start up a business, make sure you are protected under the right rules and regulations to avoid hassle and financial problems in the future. Choosing the right business form is an essential step on the journey to building a large, profitable company.
The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.