Starting a new business is exciting and challenging. The first step to starting your business off strong is forming it properly with the help of an experienced lawyer. As you grow, having expert guidance from a knowledgeable lawyer at Business Lawyer Houston - Lloyd & Mousilli - Attorneys & Counselors at Law will ensure that all aspects of your legal structure are set up correctly and provide protection as you grow.
1. The first thing you need to do is evaluate the type of business you want to start.
Different corporate structures are available for different kinds and sizes of businesses, some reducing tax liability more than others:
– Sole proprietorship: No formal business entity, just one person who controls all aspects of the company and is personally liable for any debts.
– Partnership or LLC: A partnership consists of two or more people doing a specific type of work which they share in profits (who may also be personally liable). An LLC is similar to a partnership, except the members of the LLC have more limited liability.
– Corporation: A corporation is a legal entity that separates ownership and control from personal liability for debts.
A lawyer can help you make better decisions.
2. Evaluate your risk tolerance and decide if you`re willing to take on a large amount of debt.
Consider the tax implications of your decision: do you expect to make a substantial profit in your industry? What kinds of expenses are you going to incur?
3. Determine how much money you have available for starting your business. Is it possible for you to come up with more capital? You`ll need money to invest in the business if you don`t have startup capital.
In most cases, you`ll need money to spend on the business up front, even if there are some situations where you don`t need startup capital.
When do you need capital?
– Corporations typically need an initial allotment of equity to be approved by the state
– Limited liability companies need to be registered with the state. This is done for a small fee; how much that fee is depends on the laws of the state you’re in.
– Sole proprietorships may not require any formal paperwork or upfront cost, depending on state laws.
– Partnerships can be more elaborate; a lawyer is necessary to go over and form the finer points of a partnership, so it is effective.
4. Look for an attorney who specializes in the area of law that best suits your needs and budget. The type of Business Lawyer Houston you`ll need depends on what kind of company you are establishing.
Look at your local business associations or chamber of commerce to find one. Also, you can ask a friend or acquaintance who has been in the industry, if they recommend an attorney: this will help avoid any conflict of interest issues with their own lawyer and is also less expensive than hiring a private firm.
5. Seek out professionals who can help guide you through the process.
Support groups are essential. You will be better served when making difficult business decisions if you have support & advice from people above & beyond your lawyer. Together, they`ll form your “inner circle” support group.
6. Don`t sign any business contract until it`s been reviewed by an attorney.
You`ve retained a lawyer to start up your business; don`t forget their expertise when it comes to drafting and signing contracts. To prevent legal trouble later, make sure every contract is reviewed by your Houston Business Lawyer.