The best advice I can give to somebody starting a new business is to talk to your peers and seek expert advice. A lot of prospective business owners think that they will go into business, see how the business runs, and then they will do all the things they need to do for their taxes and for their legal profession. This is absolutely the wrong advice that anybody can give you.
When clients come to me, starting a new business, it’s not just a matter of what formations should they have. Should the business be a partnership, or an LLC, or a corporation? Rather, I tell them you need a good accountant. You need to start thinking about, do you have to pay sales tax in advance? Do you have to get licenses? If you’re opening a restaurant, you need a liquor license. You need to deal with the local health inspectors. You need a good attorney to draft a partnership agreement or a shareholder agreement, so that you and your partners know what each of your responsibilities are, and what will happen if the business fails.
It is also important that you consult with an experienced insurance broker. You may need different insurance based on the type of business you are going to start. For example, if you have a restaurant, you have the public coming in, you need liability insurance in case someone slips and falls. If you have employees, you need workers’ compensation insurance. I’ve seen many small businesses get defeated, not by the lack of business or lack of customers, but rather, by the fines, interest, and penalties assessed against them by the tax authorities, workers’ compensation board, or a lack of insurance or the proper licensing.
If you are considering starting a business and require the services of an experienced business formation attorney, contact the Law Offices of Allen A. Kolber, Esq. today to schedule a consultation and discuss your options.