What Questions Should I Ask When Considering Forming a Business?
If you are thinking about forming a business, the three biggest questions revolve around structure, taxation, and succession planning.
- “How will the business be structured?” It can be formed as a sole proprietorship, a corporation, a partnership, or a limited liability company.
- “How will the business be taxed?” Your options are sole proprietorship, C corporation, S corporation or partnership.
- “How will you get ‘out’ of business?” You need a plan if the business succeeds, if it fails, and for when you want to retire or sell.
What Pitfalls Can An Attorney Assist Me With When Forming My Own Business?
The primary reason folks create business structures is to separate their personal assets from their business assets. If the business fails, you don’t want to lose your home. Similarly, if you are in a lawsuit as a result of a car wreck or a dog bite, you don’t want to lose your business.
An attorney can help you navigate around dozens of pitfalls. For instance, how do you maintain your corporate records and keep up with the myriad government requirements and filings? What happens if an employee sues you? How to deal with the Americans with Disabilities Act? How to deal with sexual harassment in the workplace? What if someone is injured on the job? What if a customer is injured?
A relationship with an attorney can help you with these, and many other, risks, dangers, and hazards that come with owning your own business.
What Factors Should I Consider When Choosing The Type Of Entity For My Business?
Several. The type of business operation is an important factor. Consultants generally have different structures that real estate investors, people who manufacture things or doctors. Other significant details include the following:
- How many owners are there?
- Are any of them family members?
- How old is each one?
- What sort of transition or succession plan do you envision?
- Do all owners have the same vote on company matters?
- Who’s in charge of the company day to day?
- Who’s putting in the money?
- Will there be any loans?
- Who is the advisor team – CPA, real estate professional, insurance agent, etc.?
The initial question and answer meeting with your lawyer is the most important one. From there, the attorney can recommend the structure, taxation, operational and succession guidelines to best help and protect you and your business.
For more information on Forming A Business In The State Of Colorado, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (719) 627-5955 today.