A startup company needs to choose the right type of business structure, and needs to create many important legal documents like partnership agreements, employment agreements, buy/sell agreements, and more. This checklist for startups can help you to make sure you are doing everything that you need to do as a startup owner to set your company on the path to being successful.
One of the most important components of making a business plan is to have a plan in place for how your company will be financed. You need to consider the risks versus the rewards as you select financing options. If you get investors, you will usually need to give them a portion of the profits the company makes, but you will benefit by being able to spread out the risk and not take on 100 percent of the potential for financial loss. If you take a loan or finance the company yourself, you can maintain complete control of the business and its operations and will not have to share the company profits. However, if your company is not successful, you will be 100 percent financially on-the-hook for the losses. Find out more about financing options for startups.
Choosing the right business entity is one of the most important things that you will need to do as a part of your business plan. There are different options, including incorporation or forming a Limited Liability Company (LLC). Both a corporation and an LLC can provide important liability protection for business owners so their personal property and wealth is kept safe even if someone sues the business or the company is bankrupted by debts. Sole proprietorships and partnerships are simpler business structures with less startup costs, but more risk of liability. Learn more about business entity selection.
There are many benefits of forming an S-corp, which should be considered as a part of your business planning. Forming an S-corp allows you to get the liability protections associated with a corporation, without the worry about double taxation that comes from a C-corp. S-corps allow profits and losses to pass through to business owners. The ability to classify some of your earnings as a distribution, rather than as wages, can also be very beneficial because you can reduce your tax burden by limiting the amount of your earnings subject to Social Security and Medicare taxes. Find out more about the benefits of forming an S-corp.
Your startup should create different kinds of legal documents depending upon how your business is structured. You may wish to create a partnership agreement or a shareholder’s agreement if you have co-owners. Employment agreements are helpful if you have staff, and nondisclosure agreements can protect trade secrets. These documents are just the tip of the iceberg. Learn more about legal documents your startup should create.
Intellectual property is often one of the single most valuable assets that a business owns. It is important for companies to find ways to protect intellectual property, both while the company is being run as well as in situations where an ownership interest in the business and property is being transferred due to death or incapacity. Find out more here about how you can protect intellectual property that your business may own during your business planning process.
Getting help from a legal professional with business planning is important for lots of reasons. Your lawyer brings a legal perspective to the table and can point out some issues you need to address which you may not have considered on your own.
Your attorney can also advise you of how default Florida laws govern your company’s operations so you can make decisions about how to work within the legal framework and make business transactions work for you. You should get a business planning lawyer involved as soon as possible in your planning process, so if your company is in or around Fort Myers, give us a call at (239)-225-7911 or contact us online today.