So you want to be your own boss!
So you want to go into business for yourself and be your own boss?! Although this is the big decision, there are still many more decisions to make and things to consider. What follows is a brief overview of some frequently asked questions about starting a business. In upcoming issues of the newsletter we will look at specific business topics that will be of interest to those just thinking of starting a business as well as those who have been operating a business for some time.
How can I get into business?
There are several options available for those who want to be their own boss, including:
o starting from scratch
o buying an existing business, or
o buying a franchise.
What are the various business structures?
The three most common legal structures that are used to set up a business are:
o sole proprietorship,
o partnership, and
As its name suggests, a sole proprietorship is owned and operated by one person. It is by far the easiest to set up, since there are very few legal formalities. On the down side, you face unlimited liability because you and your business are considered one and the same.
A partnership involves two or more people carrying on business together. Although a partnership is fairly easy to form, the partners should consider entering into a formal written agreement. As with the sole proprietorship, partners face unlimited liability, both individually and collectively.
A corporation, unlike the other two structures, is a separate legal entity. As a result, one of its biggest advantages is limited liability for the shareholder(s). It is however, more difficult and complex to create a corporation and is subject to extensive government regulations.
Is a written agreement between the owners of a business really necessary?
YES! While things may seem bright and rosy at the start of a new venture, it is surprising how quickly they can turn sour. Both shareholder and partnership agreements can address a wide variety of issues and can save a lot of heartache down the road.
What should you consider when signing a commercial lease?
Commercial leases can be quite lengthy and complex. They contain a myriad of clauses covering everything from rent to renewal options. The following are a few key areas you should be aware of.
• Be sure that anything the landlord promised during negotiations, is included in the written lease.
• Be certain you are really getting the amount of space promised.
• Be sure you know what rent is payable, including extras, as well as when and where it is payable.
• Be sure the landlord has not given you an option to renew in one part of the lease and then all but takes it away in another.
Should you hire a lawyer to help?
When getting your new venture off the ground, do not overlook the importance of hiring a lawyer. An experienced business lawyer will prove invaluable not only at the start, but throughout the life of your business. He or she can provide assistance with:
o the purchase of an existing business;
o the purchase of a franchise;
o the incorporation of a new or existing business;
o drafting partnership or shareholder agreements;
o the negotiation of leases;
o drafting employment contracts;
o ongoing employment issues;
o contract disputes; and
o collection problems.
Howard Steinberg and Stan Landau both work in the area of corporate commercial law and would be happy to assist you with your business requirements.Share