Before you start a business, first you must decide which type of business is best.
Unfortunately, that is is not as simple as it seems as there are wide variety of business formations, such as:
- Sole proprietorships,
- General partnerships (GPs)
- Joint ventures (JVs)
- Limited liability partnerships (LLPs)
- Limited partnerships (LPs)
- Limited liability limited partnerships (LLLPs)
- Limited liability companies (LLCs)
- Corporations (including C corporations and S corporations)
- Non-profit corporations.
As you can see, there are a number of different business formation options and each type of business has its advantages and disadvantages. For more information on these please visit our page on types of businesses here.
As an entrepreneur and future business owner, you should seek advice from an business attorney for the best structure that fits your business model, while at the same time limits your personal liability and taxes.
If the business is not formed the proper way, you and your co-founders could be risking all your personal assets to potential creditors of the newly formed business.
After you have selected the best formation for your business, each entity (besides sole proprietorships and basic forms of general partnerships) must file certain documents with the state they are doing business in.
The type of forms and information required vary depending on the type of the business.
A business attorney will file these documents with any states you expect to conduct business.
If you have or are planning on receiving investment dollars for your business, even if it just friends or family members, they will most likely want to review and execute an investor agreement which is discussed in further detail here.
It should be noted that a business attorney will know how to advise you about buying commercial property as well.
There are certain protections that can be implemented to make sure your business and you are protected in case something happens on the property either to an employee or a customer.
Too many businesses fail because an injury occurred on their property. Seek counsel to protect your company, your family, and your assets.