While most people believe they will never need to broach the topic of business law, this is a huge misconception. In fact, if you ever decide to start your own business, you will need to gather as much information as possible about the laws that apply to business. Also, individuals looking to join into a partnership with someone else will need to know these laws. Whatever the case may be, business laws are complicated, so the earlier you start learning, the better.
Choosing A Type Of Business
It would take the average person months to learn everything there is to know about business laws. This is why it is imperative to seek consultation with a law firm that specializes in business law, when starting a new business. One of the most complicated decisions you will need to make is deciding what type of business you want to start. There are four primary options to choose from, including partnership, corporation, sole proprietorship and Limited Liability Company (LLC).
Each of these options is unique, offering both advantages and disadvantages. To avoid financial and legal ramifications, hiring a well-qualified business attorney is a necessity. This professional will give you advice and help you make the decision, as well as stick with you through the entire process and beyond.
Protecting Yourself From Liability
One of the biggest concerns that all business owners have is the liability. Of course, larger businesses will be at a higher risk of liability than smaller businesses. One thing is for sure, without the business and employment lawyers on your side and the right protections, you will be at risk, regardless of how you chose to organize your business.
If you ask any business attorney about business types and protections, they will tell you that a limited liability company and corporation will offer more protection against personal liability than sole proprietorship and partnership. Of course, you may be drawn to the later, because they are so easy and cheap to set up. However, if your main concern is a liability, an LLC or corporation will always be your best options.
Financing Your Business
Another issue that many people face, when it comes to funding a business is limited finances. There are two great ways to fund a business, investors and loans. Both of these are great options, but loans will give you more confidence that your business will succeed. This is because once your loans are paid in full you will be able to secure any “ongoing business profits. If investors were involved in your business, you would be forced to split the profits among them.
However, if you choose to go it alone and take on all of the financial responsibility of your business, you will also need to take on all of the risks. With investors, you can spread the risk around a bit, so you will not feel the brunt of a financial loss or failure.
Just remember that obtaining a loan is not always the easiest task. In fact, you may be required to provide security for the loan, before the financial institution will even consider your application.