| When starting up a business, there are some important | | | | and grow. You do not want to be left with liability |
| legal matters that you'll have to deal with, no matter | | | | issues, debt problems, or unnecessary obligations, and |
| how much you'd love to just dive in and get started. | | | | what kind of legal entity you are will also determine the |
| However, if you neglect these legal steps, you're going | | | | tax strategy that the government applies to your |
| to find that maintaining the business down the road | | | | business. Protect yourself from liability issues, and |
| becomes much more difficult, and in some cases, | | | | make sure you're not personally held responsible for |
| impossible. It's in your best interest to take these legal | | | | any unfortunate happenings. |
| aspects seriously and get them sorted out as soon as | | | | 3) Determine Capitalization |
| possible when starting a business. | | | | You cannot survive as a business without proper |
| 1) Develop a Strategic Business Plan | | | | capitalization, and this will include both matters of equity |
| This plan will be the blueprint and backdrop for your | | | | and debt. Equity is gained through sales of business |
| business - the thing upon which all other aspects of | | | | ownership interest, such as stock shares, allowing this |
| starting your business are based. Also, having a | | | | portion of capital to not require repayment to financial |
| business plan will make it much easier for you to | | | | backers. Before you even think about starting your |
| receive financing for your new business. Very few | | | | business, you'll need to have a decent rapport with |
| people actually have the available funds to cover | | | | your bank or an established financial institution. If you |
| start-up costs, and a business plan is something you | | | | don't have adequate capital, your business will fail, |
| can present to family, banks, or other private investors | | | | regardless of how thorough your business plan was. |
| to gain their confidence in your venture. It should outline | | | | 4) Taxes, Taxes, Taxes |
| in detail how you plan to operate your business, and | | | | Everyone pays taxes... and so will you and your |
| exactly what this business is. | | | | business. You'll have to deal with income tax, |
| 2) What Kind of Legal Entity is Your Business? | | | | employment tax, sales tax, and any other state taxes |
| This will determine whether you can be sued for | | | | imposed by local governments. If your business fails to |
| issues arising between the business and your | | | | pay the required taxes, you as an owner will be held |
| customers. It is extremely important, and often | | | | responsible - thus, you'll need to develop tax plans for |
| neglected when starting a business, but this can | | | | your business on a regular basis, in order to ensure |
| actually make or break you during those crucial first | | | | you're following the most current regulations and tax |
| years when the business is trying to be established | | | | laws. |