Business Formation: Proven Strategies for a Strong Start

Business Formation: Proven Strategies for a Strong Start

You’re a Colorado entrepreneur who is excited about the future and ready to create the business you’ve been dreaming of. However, you may find the idea of business formation confusing or even intimidating. Thankfully, it is not as difficult as it might seem to get a business up and running. The key is to take advantage of proven start-up strategies and to get good advice on business decisions that lie outside of your area of expertise. .

Tips for Launching Your Denver Small Business

Below are some key considerations as you work to establish a solid foundation for your new venture.

Create a business plan

Every successful business starts with putting a detailed plan into writing. Having your strategy fully mapped out in your head is great, but putting it on paper ensures that all stakeholders are literally on the same page. Your business plan should cover a wide range of topics including details about your product and/or service, target market, management structure, marketing strategies, etc. Not only will you and your team benefit from the time and effort you put into crafting your plan, other parties like lenders and investors will expect business formation documentation from you.

Form the business entity

Will your business be a limited liability company (LLC)? A sole proprietorship? A partnership? The decision you make at this stage of business formation will have long-term implications on a wide range of subjects from taxation to legal liability. Be sure you understand which business structure is right for your needs. Deciding on the legal structure of your business is perhaps the most important point at which to get business development legal help.

Choose your business name wisely

The are many things to consider as you pick a name for your company. You want it to be descriptive and memorable today, but you also need to think about whether it will still be applicable as time passes and as your business grows and potentially diversifies. You also need to do thorough trademark research to ensure you aren’t infringing on anyone’s rights.

Obtain insurance

From general business liability insurance to what is known as “errors and omissions” insurance, there are many types of coverage you should consider. You want to have the appropriate policies in place before your company is operational so that you are protected from Day 1.

Get required permits and licenses

Many types of businesses must be authorized by regulatory agencies to begin operations. Be sure you have done thorough research and have the certifications required in your area. A Colorado small business lawyer is your best resource for determining what permits and licenses your business will need to operate legally.

Establish financial relationships

For most small businesses, the saying that “it takes money to make money” is very true. Not only should you find a primary lender, it’s never a bad idea to connect with people at other institutions in case you ever choose to move your business or have a need that your primary lender can’t address.

Consider intellectual property protection

Wikipedia defines intellectual property as “a category of property that includes intangible creations of the human intellect, and primarily encompasses copyrights, patents, and trademarks.” Intellectual property law is very complex, so it is a good idea to talk with a Denver business attorney who specializes in this field to find out what steps you should take to protect your ideas. And, keep in mind that while you may not think of your type of business as one that would produce intellectual property, you may be surprised to learn that it does.

Find trusted advisors

From attorneys to accountants to business mentors, developing relationships with people who will share their insights can have a very positive impact on the success of your Denver small business. Plus, once you have established a core group of advisors, they can refer you to experts in other areas as needed. What’s more, they may even be able to steer some business your way!

And the Most Important Business Formation Advice of All Is…

While preparation is critical to success, determination plays an equally important role. The idea of “hoping for the best but planning for the worst” is very sound advice. Few Denver small businesses achieve the success they are striving for without hitting some bumps along the way. Patience, persistence, and a commitment to making it through the tough times will be some of your most valuable assets.

If you need a trusted resource for vital information on business formation, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Small Business Attorney. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney
501 S. Cherry St., Suite 1100
Denver, CO 80264
720-258-6647
Elizabeth.Lewis@eclewis.com

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How to Start Your Business Off On the Right Foot

How to Start Your Business Off On the Right Foot

Before you decide on a location, design a logo, or pick out furnishings, it is crucial to choose the right business structure for your small business. This decision will greatly affect your daily operations, impacting everything from liability and taxes to the amount of paperwork and control you have over your own business. There are numerous forms, or structures, each with their own benefits and drawbacks and some with overlapping characteristics. An experienced business attorney will explain the pros and cons and help you determine which structure is the most appropriate for your Colorado business and financial goals. This post will explore four of the most common business structures. According to the Internal Revenue Service (IRS), these are Sole Proprietorship, General Partnership, Corporation, and Limited Liability Company (LLC).

1. Sole Proprietorship

The most basic of business structures, sole proprietorship is used by more than 70 percent of businesses in the U.S. according to the Small Business Administration. With this structure, you are responsible for all of your business’s profits and debts. You are also personally liable for everything that the “business” does as you are the business.

2. General Partnership

Two or more individuals own the business in a general partnership. Most times, partnerships are general partnership in which everything is shared based on the ownership of each partner. Partnerships may also be set up as limited partnerships, limited liability partnership, or a limited liability limited partnership. With general partnerships, all partners have personal liability for what the partnership does.

3. Corporation

A corporation is an entity that is separate from its owners, meaning it has limited liability. It is independent with its own legal rights (e.g. ability to sue, be sued, own and sell property and stocks, etc.). Most household names, like Coca-Cola, Microsoft, and Google, are corporations. There are two ways that corporations can be taxed (C corporations and S corporations) so many people will refer to their corporation by its tax structure rather than just a corporation.

4. Limited Liability Company (LLC)

LLCs have been seen as a hybrid of partnerships and corporations. Their owners are called “members”. They can be taxed multiple ways leading to being loved by CPAS. LLCs protect members from personal liability for the debts of the business most of the time, provided they have not conducted activities in an illegal, unethical, negligent, or irresponsible manner.

A Closer Look at Business Structure
Choosing the best structure to insulate your business from the beginning is one of the most important decisions you will make. It is easy to become swept up in the commotion of getting your business started, but you have to think about your needs now as well as in the future. Consider what your business might look like once it is well established, if something happens and you are unable to run your business, or if you decide to expand or sell. Although it can be difficult to switch to a different business structure because of strict tax code regulations, you may need to reassess yours down the road.

A sole proprietorship is the simplest business structure to set up, but it can be harder to secure outside funding than it is for a corporation. Corporations have the least amount of personal liability, and partnerships share liability as defined by the type of partnership. For sole proprietors, all profit is personal income and taxed accordingly. The LLC structure prevents double taxation, meaning you are not taxed as a company and as an individual. There are many more distinctions among the various business structures related to taxes, liability, control, funding, licenses, permits, and regulations. You can find more information on choosing your business structure on the Colorado Secretary of State website.

Your small business attorney will explain the distinctions, advantages, and eligibility requirements among the different business structures. After you have selected the right business structure, your attorney can assist you with the following: filing paperwork, keeping records, hiring employee and professional support, determining services and location, maintaining appropriate insurance coverage, and more.

If you need help with your business formation, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Business Attorney. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney
501 S. Cherry St., Suite 1100
Denver, CO 80264
720-258-6647
Elizabeth.Lewis@eclewis.com

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