Starting a New Business Venture
- May 12, 2018
- 2 min read
Greetings!
I put together this message for my clients who are interested in or have started their own business. First of all congratulations on taking this step! I am proud of you and will support you in any way that I can. Being a business owner is a lot of worker, but can be very rewarding and fulfilling.
I suggest that you write your vision and carefully strategize so that you are successful in reaching your goals. In structuring your business, some things to think about are: (1) the amount of control you want to have, (2) your vulnerability to lawsuits, (3) expected profit over the next few years, (4) whether you will need to borrow funds in the near future to operate, and (5) where you ultimately want to go with your business. Most of you will opt to operate as a sole proprietorship or LLC. Below are some advantages and disadvantages to operating as a sole proprietor versus a limited liability company (LLC) and further a list of tasks for you to work on.
Organizational Structure
Limited Liability
Personal protection from LLC liabilities
LLC taxed as either a sole proprietorship, partnership or corporation (by election)
Profit and loss can be allocated
More expense to create than partnership or sole proprietorship
Sole Proprietorship
Personally liable for all debts and incidents that are a result of the company
Limited in the ability to raise capital
Sole proprietor is in complete control
Profits from business flow directly to owner
TASK LIST
Write a one page vision and plan for your business
Determine legal structure of entity and prepare formation paperwork
Open separate business bank account with company name
Obtain employer ID number if you plan on having employees in the near future
Register with the city and obtain a license to do business
Set up a filing system to keep all of your business paperwork in order and in one place
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