Getting Your Business Off the Ground: How a Business Formation Attorney Can Help
Written by: Natalie Klyashtorny
While the pandemic forced hundreds of thousands of small businesses to close throughout the United States, it also saw Americans starting new businesses at the fastest rate in more than a decade. Seizing on pent-up demand and new opportunities after the pandemic shut down and reshaped the economy, applications for the employer identification numbers that entrepreneurs need to start a business passed over 3.2 million in 2020, compared with 2.7 million in 2019. Starting your own business is an enormous yet exciting undertaking, and you will likely want to incorporate the business into some type of legal entity. With the guidance of an experienced and knowledgeable business formation attorney, aspiring entrepreneurs can turn ideas into viable business opportunities. In this blog, we will discuss the different ways an attorney can help you get your business off the ground with the best legal structure in place.
Choosing the Correct Form of Business Organization
One of the first important choices you will make when starting your new business is which business entity is the best fit. This decision should take into account both your short and long-term legal and financial goals. Deciding which organizational form your new business will take impacts everything from how you pay taxes to your liability. There are advantages and disadvantages for each type of business formation structure. A few important considerations are:
- Protecting your personal assets from business liabilities and lawsuits.
- Maximizing business income by exploring and understanding tax implications.
- Reviewing the record-keeping requirements for each entity type.
- Exploring the cost and complexity of compliance with local, state, and federal laws.
With these considerations in mind, it is fundamental that you select the right form for your needs from the available options including:
- Sole Proprietorship: Owned by one person with complete responsibility.
- Business Partnership: Owned by two people who decide responsibility between them.
- Limited Liability Company (LLC): A hybrid business structure that provides limited liability features and tax efficiency.
- Corporation (For-Profit and Non-Profit): Independent business entity with limited liability features and tax efficiencies, but a more complex set of formalities and governance.
Between the above options and other available ones, retaining a business formation attorney can help you choose the best possible option for your business with both short- and long-term goals in mind.
Other Ways a Business Formation Attorney Can Help You
Forming your business typically involves multiple applications and legal processes, including registering your business name and creating a business bank account. For an already stretched business owner, this can be overwhelming, especially given how difficult it is to navigate business entity laws. Here are a few other ways in which an attorney can help you start your business:
- Personalized legal documents: When doing things alone, many business owners reach for blanket legal documents online, but these rarely meet requirements and may expose owners to more liability. Each business is different, after all, and will likely have different legal needs as a result. The combinations of necessary paperwork are endless and it is vital to engage with an attorney to make sure special required documents are included at this formation stage.
- Knowledge of state laws: State laws can be complex, but a local attorney will know precisely what your business can and cannot do.
- Paperwork: With so much on their plate, a new business owner often just doesn’t have the time to tackle all of the many forms involved in business structure. Failure to complete the proper forms, or filling them incorrectly, can land you on the wrong side of the law. An experienced attorney will take care of these things for you, making sure that all paperwork is complete, accurate, and readily available when necessary.
The team at Nochumson P.C. strives to help aspiring business owners turn their dreams into viable business opportunities. We accomplish this by developing ongoing relationships with our clients, advising them on a variety of business formation issues, and routinely helping clients throughout the life of their business.
