Business Formation

Getting Your Business Started

You have an idea. You and friends or relatives decide to start a business. You know what you want to do, but you're not sure how to do it legally. You know you are probably going to have to deal with governmental regulation, statutes, red tape along with various law enforcement agencies and taxing authorities. But which ones? And how might they apply to your business plans?

Do we need to incorporate? How about a partnership? Would a limited partnership work? How about a limited liability company? The answer is it all depends on what you want to do. The law provides several different forms and structures for forming any particular kind of business.

One of the largest, and most common, mistakes businesses make is assuming that “we will always be friends.” Circumstances change. People change. Opportunities arise. Over the long run, life can throw you many unexpected curve balls. The prudent businessman sets up an organization that will best allow him to weather such storms, and protect his interests. Trust freely, but cut the cards.

At the outset you realized that as circumstances may change for either you or your associates, you want everyone to be happy with the outcome. At this moment you don't know which end of the stick you are going to be on when the time for division arises. Therefore, if you set up an exit strategy which seems fair to both sides now, you can often avoid expensive litigation, not to mention emotional turmoil, down the road.

Get off on the right foot so that you can dedicate your time to the business with a sense of security.