In their November 2014 issue, the Minnesota Valley Business Magazine includes an article written by BGK Attorney Paul Shneider entitled “Protect Yourself at the Start of a New Business”. This article addresses the important issues, considerations and potential complications one encounters when forming a new business.
“Starting a business is an exciting and challenging time for entrepreneurs. In addition to actually running the business, there is an incredible amount of things to do – opening bank accounts, obtaining licenses, setting up a website, marketing, tracking income and expenses, determining what type and levels of insurance are appropriate, paying taxes, creating and managing intellectual property, hiring employees … The list goes on and on. All of these tasks require the entrepreneur’s scare resources of time and money.
Often, the biggest concern when starting a business is practical. What happens if something goes wrong – can someone take your house or other personal assets? Depending on how the business is organized and operated, the answer may be yes.
One of the best ways to protect your personal assets from a business creditor is to operate the business within an entity. There are many considerations in choosing an entity – tax considerations, whether the business will have employees, how many owners or outside investors will be involved and what role each will have in the business, the exit strategy for transitioning out of a successful business, etc… – and this article cannot look at all of them. While an entity may provide tax and financial incentives, one of its greatest benefits is the ability to limit the personal liability from the risk associated with your business pursuits.” To continue reading click here. For help with your business formation questions contact Paul at 507-345-1166.
