This is my 3rd post in my series for starting up a small business
- Decide if you should take a partner or not, do a PROs and CONs list, research partnership laws and organization structures.
- Look for someone that complements your knowledge and skills
- Have a legal agreement in place including a buy-sell and ownership percentages, roles, liabilities before you start.
- Hire a specialized lawyer before deciding which form of organization will be chosen to help you with the change in the labor laws, use an intellectual property lawyer to protect your intellectual property rights: your trade name, company name, logo, etc.
- Research the tax laws, liabilities, benefits of each business form: Sole proprietor, General Partnership, Limited Partnership, C Corporation, S Corporation, Limited Liability Company.
- Consult a CPA regarding the different tax breaks and laws for the different forms of organization before deciding. Also establish a tax deferred pension plan for yourself/ employees if any
- Outsource your payroll to a payroll service provider
- Totally separate between your personal accounts/ activities and your business accounts/ activities
- Research with an Insurance Business broker what kind of Insurance coverage applies to your business: General Liability, Errors & Omissions, Workmen Compensation, Health insurance
- Join a local service organization such as the local chamber of commerce.
- Not use or seek the opinions of a lawyer and/ or CPA or not take their advices’ seriously
- Start a corporation without the use of a legal service or an attorney
- Not researching the liabilities for each business form as well as those of the partners/ members/ shareholders
- Mix the personal and business accounts
- Think that a corporation is total protection from personally guaranteed liabilities
- Not having a reliable accounting system or not hiring a CPA or accountant
- Not having agreements or business contracts in place
- Sign a long lease or an important contract without consulting a lawyer
- Failure to pay taxes including but not limited to the payroll tax liabilities on time
- Failure to obtain the proper licenses and permits designed for the different business forms