Business Formation - How to Start a Business

Nicholas B. Proy - Proy Law Firm - How to start your small business attorney

The Proy Law Firm can help you with setting up your small business. If you have wondered how to start a business, forming a business entity is the second step (after all, before you can worry about how to start a business or how to open a business you need an idea for your business).

Many small business owners prefer a limited liability company (LLC) - also known as an "LLC company" - but it is not necessarily a "one size fits all" small business entity. There are many considerations that go into determining the best business entity for your particular situation before opening an LLC company, such as tax implications, liability protection and corporate administrative considerations. If you are interested in forming a small business you should have a small business lawyer who handles these matters on a daily basis.

Common Small Business Formation Mistakes:

(1) Many individuals decide on an LLC company without considering tax implications and liability protection for its owners. It is crucial that you understand the liability protection and tax implications of the many different business entities before deciding on which one to use.

(2) Each business entity has different requirements to maintain the business. It is important to know what is required to maintain a business entity before setting it up. Before filing your business registration, you should consult with an attorney to determine the best business type for your new small business.

(3) You may be in a partnership and not even know it! A partnership may be created by the actions of the individuals even though there is no formal partnership agreement. This poses serious liability concerns, among other things.

(4) Many individuals are worried about the liability of a corporation when forming a new business. It is important to know and understand that the liability of a corporation is dependent on how the business is maintained (see #2 above) and how the business is structured. The last thing most business owners want is personal liability for corporate actions.