Quit your job? Starting out on your own path? What Now?
When you take that first step as an entrepreneur, the last thing that you want is for trouble to come calling. How you keep trouble at bay is important.
Trouble takes the form of tax liability, personal liability, trademark issues, and more – and they all need to be addressed. Sayre & Harris Law, PLLC, can help you identify the pitfalls of being your own boss, and put you on the path to entrepreneurial peace of mind.
The best first step is to form a business organization. Operating on your own? You can be a:
* Sole Proprietor
* Single Member LLC
* Sub-chapter S corporation
Working with another? You can be a:
Working to create the next Big Thing? You can be a:
* C corporation
If you are like most folks, small is a great way to start. The odds of any new small business waging an effective competitive war with Amazon is slim. Most likely, you may want to start off as a sole proprietor to quickly get things rolling. Here is what you need to be a sole proprietor:
That is the whole list of things that you have to consider, and now you can be off and running. However, the risk of loss in your sole proprietorship is all on you, and that means everything – your automobile, your home, your personal wealth. As a sole proprietor, when something goes wrong, you have pushed all your chips forward. But you ask, what do I have to lose? Everything. Without a corporate entity, you stand to lose everything.
Here is what you need to be a partnership:
Once your partnership is off and running, now the risk of loss is shared between the partners – personally. Now you both stand to lose everything. Consider setting up an LLC or an S corporation.
CORPORATE ENTITY 1: THE LIMITED LIABILITY COMPANY – AN LLC
LLCs in their several variations are meant to shield you from the liabilities that your company incurs. These liabilities can include tax, tort, and trademark liabilities. There are several things that you either must or should do to form an LLC to shield yourself from the costs of things that go wrong:
CORPORATE ENTITY 2 – THE SUB-CHAPTER S CORPORATION
S Corporations are stock corporations with a twist granted by the IRS – all income, losses, deductions, and credits pass through the corporation to the shareholders.
To be an S Corporation you must:
Please note that the IRS does not recognize an LLC per se. If you choose to be an LLC, it will be regarded as a separate entity by the IRS unless you elect how you wish to be classified.
Confused as to where to start your new adventure? Contact Arthur and Bob at Sayre & Harris Law, PLLC. We can get you started on the right road and get you the peace of mind that you need to concentrate on making your adventure a success.
Having an operating agreement is another layer of protection that says “My business is a distinct operating entity. I keep a separate life from my business.”