Starting a business is exciting and it all starts with forming and registering your company! Make sure that you’re protecting yourself and your assets by choosing the right type of entity for your business needs. Does a corporation or limited liability company (LLC) make the most sense for your company? Note: You can form an LLC from a worksheet you get online but that will not include the Operating Agreement, Minutes or EIN number. All are very important. Lawyers make a lot of money cleaning up the mess created by inexperienced individuals starting their own company to save costs, but it defeats the purpose when they have to call in help to correct what could’ve been done correctly at the start.

Considerations When Electing a Type of Entity Include:

1. Source of Capital: Will there be investments in the company?

2. Business Plan: Have you established a niche? Have you come up with a business plan that will enable you to run your business in a cost-effective way? Deciding to open a business is not enough, you need to be able to demonstrate that your customers will get something of value at a better value than your competitors are already offering them.

3. Your Risk: Will you pass a due diligence check? Do you have an experienced team and resources behind you and are your financials stable enough to withstand your customers’ strict scrutiny? Are you sufficiently insured to cover your risks?

4. Due Diligence: Have you done your due diligence checks on the entities and individuals that you intend to take on as customers? Are you sure that they can afford to be in business with you and pay for your services/products? You don’t want to be left holding the bag at the end of the day.

5. Start-up Capital: The money and steps needed to start up your business, such as ensuring your liability is limited, the owners’ buy-sell agreement (a business pre-nuptial), a federal trademark, trade name, copyrights, lease review, key employee agreement (non-competition agreement and/or confidentiality agreement), asset protection and general advice regarding organizational engineering is not an expense, but a necessity to ensure that you’re starting off your business in the best position for your circumstances.

6. Location: Where’s the best state to form your entity? What are your main concerns: litigation, taxes, governing laws specific to your business? We can help you decide by arming you with the information needed to make that decision.