So, you decided to start a business? Congratulations! You should have an idea that your new business has to be incorporated. There are multiple choices such as sole proprietorship, LLC, LLP, INC, and PA and taxation/liability issues that you need to tackle.
Purchasing: Perhaps, you should just buy one? Wouldn’t that create a slew of problems with previous owner(s), shares, bylaws and operating agreements? Large lump sum of money gets involved and situations get convoluted.
Benefits and risks: Pros and cons of working for self are incredible. No one can fire you! No one can tell you when, what and how you should do things unless you have partners or shareholders. It sounds great on the paper. That’s right! Put everything on the paper is very important. Starting from incorporation paperwork to operating agreements, paying attention to by-laws and employment contracts. Don’t forget to review financial statements; what company owns, its capital and debt.
Employment: Most likely, you will have someone assist you and do what you could do. If you decide to hire someone, employment laws play an important role. If you get someone who will do some work for you that you do, s/he is an employee. If you don’t pay promptly, you may be subject to criminal charges besides triple damages and your company facing a costly lawsuit. Is your head spinning yet?
Liability insurance: Incorporated business has certain protections by the state but these protections are far from enough to cover from potential litigation related to your business with specific needs.
Location: Most towns have their local rules and regulations to consider prior opening your business that need to be taken in consideration. Most likely, you will need an office. The next question is will you rent vs. own the property where your business is based. This is when you need to consider real estate issues.
Interstate: Will your business be a part of the Interstate Commerce? Will you have to deal with internet issues and contracts pertaining to your product and services? How about regulations of those states your business reaches?
If you have any questions, contact me and we will explore how your business can achieve its objectives.
By Margarita Smirnova
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