There are many tasks in life that require a basic but difficult decision: Do it yourself or hire a professional? The obvious benefit to doing something yourself is that it saves money. If the task is relatively straightforward and easy, doing it yourself is probably a good idea.
That being said, there are definite costs associated with mistakes, and there are tasks that you absolutely need to get right on the first try. In these situations, hiring a professional often proves to be the more cost-effective solution. So it goes with starting a business.
If you want to start your own small business, you probably already have a great idea and some money to get it off the ground. But do you understand the different business types, contracts, employment laws, taxes and licensing associated with starting and running a business? If not, it’s a good idea to seek the help of a business law attorney.
First, there is the big decision of what form your business should take. The type of business you start will likely affect your personal level of liability (financial and legal) and how your business is taxed. As just one example, a sole proprietorship is fairly easy to set up, but you could be held legally and financially liable for any problems the business encounters. A limited liability corporation, by contrast, is slightly more complicated but allows you to limit your personal liability in matters related to the business.
The type of business you have will also impact how taxes are handled. For some small businesses, owners will include business income taxes on their personal income tax return (they don’t need to file separately for their business). For other types of businesses, separate taxes are required.
Do you know what paperwork your business needs to file in order to operate legally? You may need to obtain special licenses or permits. You may also need to file registration paperwork with the state. Failing to take care of paperwork can become a costly headache.
For all the issues mentioned above (and more), it makes sense to work with an experienced business law attorney. Please check back next week as we continue our discussion.