Do you have a great idea and the desire to run your own business or create a partnership? Before you start your own business or your partnership, you should be aware of considerations that will take place in the process of establishing a business entity.
Starting a new business is an important decision, but proper preparation can make the process smoother. You may ask yourself where you should start and what options are available. The formation of a business is controlled by the laws of the state where business will be conducted. It is important to recognize that any business structure that you choose will have legal and tax implications. If you have a business partner, you and your partner must share responsibility for the operation of the business and will also divide the financial gains and losses that the business generates. It is recommended to hire an experienced attorney to provide you with thorough information that will allow you to start operating your business.
When deciding on business structure, owners should always keep in mind the proper fit for his or her needs and consider aspects such as:
- Risks and liabilities of the business
- Expenses and investment involved
- Income tax
Types of Business Structures
- Sole Proprietorship
- Limited Liability Company
- S Corporation
Steps to Starting a New Business
1. Create your business plan, identifying objectives and goals.
2. Give your business an official name under which it will be legally registered. Depending upon the structure of your business, the name may need to include the type of business or its abbreviation or even the name of its owner (Corporation or Corp., LLC, Incorporated or Inc., or Limited or Ltd.).
3. Verify through the Secretary of State that your name is not already registered with another business by searching the online database at www.cyberdriveillinois.com or calling 800-252-8980. If you are considering operating a business that will be providing services nationwide, you should contact the United States Patent and Trademark Office through uspto.gov/trademarks-application-process/search-trademark-database or by phone at 800-786-9199 to obtain more information.
4. Secure your business name with the Secretary of State through the process of entity formation.
5. Create a business bank account once your entity is established and receives a tax identification number.
6. Decide on your operation location.
7. Begin operating and marketing your business.
A business attorney can help you establish an entity, develop effective contracts, address employment issues, and a host of other legal matters that may arise during the ownership and management of your business.
*Information in this article was obtained from uspto.gov,ilsos.gov,illinois.gov, irs.gov, find law. The content of this article is for general information purposes only and should not be construed as legal advice.