When you are at the start of your business journey, there are so many things that you need to bear in mind and know about. And one of the main ones is that you are going to have to form your business officially. This is obviously one of the most important things of all, and something that you really need to make sure you are thinking about in the right way. Starting a business can be exciting, but it’s vital to ensure that you are choosing the right structure and handling all legal issues as well as possible.
With that in mind, let’s take a look at some of the main things you need to know about business formation if you are going to try and make a real success of this. You should find the following to be really useful to bear in mind.
Choose The Right Structure
This is a major part of business formation, and something that you will really need to make sure you are thinking about. If you are keen on trying to get this right, think about your options and make sure you know what structure you are going for. Choosing the right structure is something that you really need to work on, and it comes down to understanding the differences between the different kinds as closely as possible.
For instance, you might opt for a sole proprietorship, which is simple and low-cost, but bear in mind that it offers no liability protection. Or you might want to go for a partnership with two or more people, which could be an equal liability scheme or a limited liability partnership. A LLC is a great option if you want flexible tax options too, so that is certainly something to bear in mind here.
Perhaps you have your eyes set on something bigger, and you want to form a corporation instead. This is a more complex organisation structure that allows you strong liability protection, as well as many more funding opportunities, so it’s certainly something that you should think about.
Register The Business Name
This is a very exciting and fun part of the journey, and something that you will probably have looked forward to for a long time if you have been planning your business early on. With this, you get to finally actually register the business name, and this is where the business is officially formed as a legal entity. You have to have a registered agent if you are running an LLC or corporation, which is a person or company that receives legal documents on behalf of your business. Most businesses hire a service like InCorp to handle this process, making it easier and simpler to go through.
In any case, register the business name and you are going to find you are much more likely to get through the whole process in one.
File The Paperwork
There is a lot of paperwork you will need to file right away – and in fact, a lot of people find that they are surprised by just how much of this there is to think about and consider. Each state and country has different requirements, but there are some kinds of paperwork which you will generally need to make sure you file early on or straight away in order to be a registered and formed business.
For instance, you’ll usually need to file articles of incorporation or of organisation, depending on the business structure you have opted for. You may also need bylaws if you are running a corporation, which is a set of rules you will operate by.
Get Licenses & Permits
You will also need to make sure you have the necessary business licenses and permits in place, which is something that can be quite tricky to get right. However, it’s vital to consider, as you will get in a lot of legal trouble otherwise. Think about local business licenses you might need, sales tax permits and health permits for food related businesses. Depending on the kind of business you run and the industry you are in, there are other permits you might need too, so you should do your research and look into this.
Those are just some of the things that you can think about if you want to make sure that you are forming your business the right way. If you have done all that, you should find that it really does help you to start it right.
