Have you thought about opening your own business or purchasing an on-going business? This can be an exciting time, however you must properly plan for it taking into account various considerations.
At Garmo and Garmo, LLP, we have helped many individuals and entities through the process of opening/buying a business. From the initial evaluation of which entity to use, to lease negotiation, due diligence, and obtaining various business licenses/permits, depending on the type of business. Our attorneys are experienced in all aspects of starting/purchasing a new business.
When starting/purchasing your own business, it is important that you select the type of legal entity you would like to operate your business as. Of course you could choose to operate as a sole proprietor, which is usually easier and inexpensive to set up, giving you sole ownership of the company. However, there are benefits to creating a separate entity instead of operating as a sole proprietor. The other ways to hold ownership include partnerships, corporations, and limited liability companies (LLC).
One of the main benefits from creating a business entity such as a corporation or LLC is that they will protect you from personal liability. As a sole proprietor, there is unlimited personal liability for your actions and conduct. Therefore, since you and your business are the same, you can be held personally liable for any debts or legal obligations that may arise from the business, and this includes any actions by your employees. By creating a corporation or LLC, you can limit your liability, while also maintaining full ownership of your business. By creating one of these entities, your liability will generally be limited to the assets in the corporation or LLC, and no personal assets may be attacked.
Furthermore, operating your business as an LLC or corporation will also make your business look more professional and will make it easier to deal with various entities you may be dealing with in the future. By applying for licenses or making purchase orders with a business entity as opposed to a sole proprietor’s name, your business will look more professional and qualified.
Finally, creating a separate business entity can give you tax benefits that you would not enjoy as a sole proprietor. By operating under a corporation or LLC, you may be placed in different tax brackets due to the way income and expenses are calculated.
For more information regarding starting your own business and the advantages of operating as a business entity, please visit the following websites:
For a free consultation regarding any inquiries into starting your own business or creating a legal entity for your business, please call Freddy Garmo at Garmo and Garmo, LLP at 619-441-2500 or send us a message for a free case evaluation.