What pitfalls should you avoid when buying or starting a business?
Determine if an LLC or a Corporation is right for you. Learn the difference if you even need one and how they help.
Hi, my name is Alison Rich, and I am a partner here at Evans Fox. This installment of our monthly video series is about buying an existing business or starting a new business.
If you have never owned your own business before, this process can seem overwhelming. My first suggestion is to surround yourself with a great team to assist you in the various aspects of the purchase, such as an attorney, accountant and banker. This is also true if you are starting a new business.
Early on in the process you will need to decide whether you will be purchasing the assets of the business or the stock or membership interest of the business owner. There are liability and tax ramifications that need to be considered when making this decision.
You may be wondering what type of entity you should use to purchase the existing business or to start your new business, and if you even need one at all. The two most common entities to consider are a limited liability company or an s corporation. There are many additional matters to contemplate if you will be going into business with others and you will want to have a buy-sell agreement in place with those individuals before you start your new business or purchase an existing business.
We have several attorneys that are happy to discuss the differences and similarities between LLCs and S corporations and the process and documentation needed to properly form these entities and to meet various time frames for certain filings, as well as to guide you through the process of starting or purchasing a business. Please contact us if you are considering buying or starting a business.