Starting a small business in America today is quite easy. The first thing to decide is what business you will be engaged in. Will you sell a physical product or provide a service. Do some research and gather information about the various different businesses that interest you. Once you have decided on the kind of business, then you can create a business plan and decide on the most appropriate type of business entity.
There are a few forms of business entities as classified by the IRS and you must use one of these entities. They are sole proprietorship, limited liability company, partnership and corporation.
The sole proprietorship is a single person entity where one person is in sole control of the business. So even if you and your spouse owns the business, one of you must be primarily responsible for the business operations. In this business entity all the personal assets of the responsible party are at risk of lawsuit.
The limited liability company is owned by one or more persons with equal or unequal responsibility for the business. This entity limits the business liability to the assets of the limited liability company.
Partnerships and corporations are more sophisticated entities that are used by large companies or parties with much assets to protect.
The sole proprietor and limited corporations are the more popular business entities since both are less complex and easier to form. The different states and towns govern exactly what is required of the sole proprietorship but usually it is only to file a registration with the Town Clerk and to open a separate bank account other than the one you use for your personal business.
Your business plan will contain detailed description of your goals for the business and how you plan to operate and will provide a roadmap to chart your course. Business plans are quite simple to make and more necessary than many people think, because it causes you to think ahead rather than just creating a fly by night activity.
If you follow these simple steps to starting a small business, you will be guaranteed a good start.
There are a few forms of business entities as classified by the IRS and you must use one of these entities. They are sole proprietorship, limited liability company, partnership and corporation.
The sole proprietorship is a single person entity where one person is in sole control of the business. So even if you and your spouse owns the business, one of you must be primarily responsible for the business operations. In this business entity all the personal assets of the responsible party are at risk of lawsuit.
The limited liability company is owned by one or more persons with equal or unequal responsibility for the business. This entity limits the business liability to the assets of the limited liability company.
Partnerships and corporations are more sophisticated entities that are used by large companies or parties with much assets to protect.
The sole proprietor and limited corporations are the more popular business entities since both are less complex and easier to form. The different states and towns govern exactly what is required of the sole proprietorship but usually it is only to file a registration with the Town Clerk and to open a separate bank account other than the one you use for your personal business.
Your business plan will contain detailed description of your goals for the business and how you plan to operate and will provide a roadmap to chart your course. Business plans are quite simple to make and more necessary than many people think, because it causes you to think ahead rather than just creating a fly by night activity.
If you follow these simple steps to starting a small business, you will be guaranteed a good start.
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