Do You Need Professional Help?

Do You Need Professional Help?
If your company will be anything other than a sole proprietorship, I would suggest that you at
least consult with a professional (business attorney or business accountant) to help you choose
and legally form your business entity. This can help you to avoid many problems in the future.
For instance, in today’s world, many new entrepreneurs form partnerships with their friends and
associates, but fail to clearly define the terms of the partnership. It is a well-recognized fact that a
majority of partnerships do not work out for various reasons – lack of defined responsibilities,
failure on partners to contribute equal effort, disagreement over expenditures, partners wishing to
exit the business, etc. A well-executed partnership agreement will spell out contributions and
responsibilities of the partners and provide for an equitable dissolution in the event that it is
necessary.
Another example would be using a professional to help you choose between corporate structures.
Many new companies decide for themselves that they will form a limited liability company
(LLC), which is a state entity. The laws that govern this legal structure have great variations from
one state to another. If your company intends to operate throughout the United States or
internationally, it may be advisable to incorporate under national law. A professional can help
you to make the correct choice.
Note: Although you can change the legal structure of your company at a later date it is less
expensive and less time consuming to make the right choice in the beginning. Also, keep in mind
that moving from a sole proprietorship (or partnership) to a corporation is easier than moving
backwards from a corporation to a more simple legal structure.