How to start a company, in just 48 hours? You bet. Now, you can apply these same concepts to most businesses in any sector. Remember, this information is simply on how to start a company. You’ll have to production, maximize, update and even finance what you first begin with.
The first step in starting a business is developing a good idea or a business idea. This usually requires market research to determine what your target market is and how that market functions today. The second step is to develop a good business plan that details every aspect of your operation.
In your business structure, you must determine whether you are going to form a corporation, a partnership, a limited liability company or a C corporation. You’ll also need to detail your unique characteristics. For instance, if your company offers accounting or legal services, you’ll need to provide your services to the public through a corporation. Once you’ve selected a state in which to do business, it’s time to consider the structure of your company. Are you going to hire employees, purchase office space and so on? Will you engage in retailing or doing door-to-door sales?
Now, to create a corporation, you can elect to be treated as a sole proprietorship, a partnership, a C corporation, a limited liability company (LLC) or a corporation. All of these types of business structures have advantages. For instance, a sole proprietorship allows for more flexibility and control. It is also considered very simple to open, transfer and run. However, a sole proprietorship is not mobile; assets cannot be transferred without dissolution, and liability cannot be imposed on the partners individually.
On the other hand, a partnership comes in very handy when there are more than two partners involved in the venture. In addition, when it comes to the IRS, a partnership does not have as much liability as a corporation. In addition, both partners are treated as individuals for tax purposes. This makes it a good idea for business entities that have employees.
An LLC or Limited Liability Company is similar to a corporation but comes with some added benefits. Unlike a corporation, no double taxation is incurred. The liability of the LLC is strictly limited, unlike that of a corporation. Also, an LLC has no requirement for shareholders’ approval, unlike corporations, although a C Corp requires a majority vote of a majority of the owners to propose resolutions.
If you’re a person who wants to start his or her own company, you’ll want to pay special attention to the structure that you select. You may be wondering how to choose between a sole proprietor or a limited liability company. A sole proprietor is the most popular option for many because of the low costs and simplicity; however, it is also the most difficult to start up and can present significant risks, including potential liability, tax liabilities, and limited liability. On the other hand, a limited liability company is much easier to operate, doesn’t require much money upfront, and provides you and your family protection from unexpected expenses.
Hopefully this article has provided you with insights into the different options available for business entities. Starting your own company can be both a rewarding and difficult experience. To ensure you are on the right path, consult with a lawyer experienced in operating businesses to help you make the right choice. Both sole proprietorship and a limited liability corporation are viable options for your new company; you just need to know what options are right for your specific needs.