Key Considerations When Starting a New Business Venture

Starting a business is exciting. While the excitement can propel you forward, it also can blind you to certain realities. Taking a moment to consider some fundamental questions when starting your business can help you build a better business and avoid headaches and hassles down the road. A knowledgeable business formation lawyer can help you answer those questions and help you get your business off to a great start.

Business Structure

One of the most important considerations is what kind of legal structure you want to use for your business. Some examples of common business structures include the following:

• Sole proprietorship
• General partnership
• Limited partnership
• Limited liability company (LLC)
• S-corp or C-corp

The type of business structure you choose can have profound implications for your liability exposure, tax liability, management, and operation. A business formation lawyer can help you decide what type of structure is best for your new business.

Ownership and Management

Before you start, you need to consider who will own the business and who will be managing its day-to-day operations. If you will be working by yourself, you will be both the owner and the manager. The situation is more complicated in other situations where multiple people are involved. Some of the people involved may be bringing their expertise, industry contacts, or particular skills to the business. Others may only be investing cash or other capital. One partner may see it purely as an investment, while another partner may want to be very involved in running the business. Allocating ownership interests and management responsibilities is an important part of starting a new business, and it should be structured accordingly.

General Liability Exposure

You also need to consider what kind of potential liabilities you may be facing. For example, if you are a contractor, you need to think about what would happen if someone were injured as a result of your work. You could face a lawsuit seeking significant damages if a deck you built collapsed and caused severe injuries. If you are going to need to take out loans to purchase inventory or equipment, you need to understand what liability you may face if you experience a downturn in your business and cannot make your loan payments. What happens if one of your business partners does something illegal or unethical that exposes the business to liability? The risks associated with your general liability exposure can be managed in various ways, including how you structure your business and get the right foundational documents in place.

Starting a New Business? Contact J Nichols Law, PLLC Today

Of course, these are just some of the important issues to consider when starting a business. Every new business has unique challenges that must be addressed through careful planning. We can help you work through the various considerations and then work with you to set up a business structure tailored to your unique needs. To schedule a consultation, call us today at 409-257-7878 or contact us online.