After Your Business Plan
You have an idea and a plan to make it profitable. But there are countless legal issues involved in starting a business and the choices you make can be the difference between success and failure.
Protecting Your Ideas
You probably know that it's essential to get a patent for any invention that will be exclusive to your business. You may also need a trademark, copyright or industrial design to protect any original names, symbols, photographs, etc. Make sure you legally protect all of your ideas from being copied by others.
The Three Types of Business
The next step is to decide on and develop the type of business that's best for your idea.
- The simplest business to set up is a sole proprietorship. This is where you are the only person involved. You run the business and you keep all profits and assume all losses. It's an inexpensive way to begin, but it can be difficult to raise start-up capital if you do need it.
- A partnership is a good way for two or more people to combine abilities and knowledge to run a business. A partnership agreement needs to be established, but it's still fairly easy to set up, and there can be additional sources of money to rely on.
- Incorporating is the most expensive and most challenging type of business to start. However, the advantages are the ease of getting capital and the possibility of being involved while maintaining limited liability.
What happens to your business if you pass away? A buy-sell agreement enables the business you start to keep going. It can ensure that your family will not be burdened with outrageous taxes and that the money they were counting on from the business will be there for them to use in the future.
You'll need an attorney to help you set up a buy-sell agreement, and it's strongly suggested that you talk to a lawyer before making any major decisions about starting your new business.