If you are starting a business, the steps you take in the first stages will have an impact that lasts for years and decades to come. Here are a few simple tips to help you maximize your chances of success and to avoid common pitfalls.
Choose the best business entity
Will your business be a limited liability company (LLC), a corporation, a sole proprietorship or some other entity? This is one of the most important decisions you can make, as it will affect how your business is taxed, how profits are shared and the degree of personal liability you will incur if things go south. An experienced business law attorney can apprise you of the pros and cons of the various business structures so you can make informed decisions.
Protect against partnership disputes
You may go into a business partnership with the best of intentions and plenty of good will to go around, but these positive feelings often fade away as partners grapple with the demands of the marketplace. To keep things running smoothly and to avoid disruptive disputes, establish partnership agreements that are specific as to each partner’s role, including responsibilities, profit sharing and decision-making authority.
Making these rules up on the fly will not likely yield a productive result. By putting them down in writing from the outset, you can avoid suspicions that one partner is suggesting changes to turn things to his or her advantage.
Create strong contracts
A quickly sketched contract will not secure your business interests. In fact, vague language, missing clauses and other contract defects can come back to haunt you in the form of lawsuits and lost revenue. By investing in strong, well-drafted contracts, you can rest assured that the language in the written agreement is in line with your wishes.
A skilled business law attorney can help you create contracts that protect your interests, guide you through all aspects of the crucial foundation stage of your business and help prepare you for potential downturns in the market in the future.