Practical Considerations for New Business Ventures
Practical Considerations for New Business Ventures
A new business venture is an exciting time for entrepreneurs. The possibilities are endless. Positive energy may be fueling your work. In all this excitement, it's important to remember new business essentials. Whether you are buying a new business or expanding your existing business, here are some things to keep in mind.
Remember to have a written partnership agreement if you intend to have partners. A partnership agreement should outline the capital contributions of each partner, responsibilities of each partner, decision making process on important business matters, voting rights, and most importantly, the dissolution process if the venture fails or partners decide to part ways. Note that if an issue is not addressed in the agreement, Georgia law may fill in the gaps. For instance, in the absence of a provision regarding allocation of profits and losses, all partners share equally. Depending on the situation, this may or may not be fair.
If you decide going solo is right for you, you should still consider operating as a limited liability company or a corporation to protect your personal assets. You will need to create a new entity and obtain an employer identification number. This number will be used for filing business taxes. It's important to have a clear delineation between business and personal activities to enjoy the protection of a corporation or a limited liability company.
If you are purchasing a business, due diligence should involve examination of financial assets, liabilities, tax returns, taxes on inventory (where applicable), examination of customer contracts, customer lists, existing leases for the business, and existing legal claims, just to name a few.
Enlist the help of professionals to assist. A consultation with an accountant, insurance agent, or a tax attorney may save thousands of dollars and boost your confidence in starting the new venture.