Settinng up a New Business
It takes a lot of time, effort, and research to get ready to open your doors as a new business owner. While some people really do simply start providing products or services with very little forethought, that is rarely a good idea. Setting up your company correctly will allow you to decrease liability, save on taxes, and set up the business for a successful future. Diving in without this background is a recipe for disaster.
If you are ready to get this process started, having an overview of what you should do and why it matters is a good starting point.
Step One: Deciding Where to Form Your Company
The decision about where to form your company may actually be more involved than you might think. There may be certain advantages to establishing your company in a state that is not the same as where you provide goods or services. Do some investigation with the help of your attorney about the benefits and drawbacks of formation in your state for your specific industry.
You may have heard that you should always incorporate in Delaware because it has very favorable laws for businesses. However, this is not always true—do not automatically jump to Delaware without doing your research.
Step Two: Determining What Business Form to Use
There are several types of business forms that you can use, and each one has advantages and disadvantages. It may make sense for your company to be a corporate because of the products it provides or how you want to attract investors, for example. On the other hand, maybe creating a limited liability company may be more beneficial for your needs because it is less formal and takes less time to set up.
The goal of your business in the long term will play a bigger role in the entity choice you make than you might think. While business formations can be changed, it is undoubtedly easier to make the right decision to set you up for your future now so you can avoid the time and expense of having to make this change down the road.
Step Three: Create a List of Contracts, Formation Documents, and Other Necessities
You need to take affirmative steps to actually create your business. An LLC, for example, will require an Operating Agreement. A Corporation needs Articles of Incorporation. You may need to create start-up contracts with members, vendors, initial customers, and more. All of these documents require a lot of forethought; they should be thorough without being so detailed that they are inflexible as your company grows.
You may also need a registered agent, both in the state where you operate and in any foreign states where you may do business. This person will accept service on your behalf and is often required by law.
Step Four: The Finishing Touches
Once you have all of your documents in place, you are ready to address some final administrative issues. These include things like:
- Getting an employer identification number with the IRS so your company can file taxes and pay employees
- Open a bank account for the business
- File for and receive any necessary licenses or permits
- Hire employees or contract workers (and do all of the things required to hire employees)
Getting your business set up can be overwhelming, but you do not have to do it alone. Florida Entrepreneur Law, PA can help.
We can walk you through what your options are and recommend solutions that fit your company’s unique needs.
Call now to set up an appointment or to get more information: 954-800-0484.
