January 31, 2014 /24-7PressRelease/
-- Many new businesses open up across Texas each year, and unfortunately, for some of these business owners, they will need to close a short time later. Not every enterprise will be successful, and it is important that individuals understand all of the risks present before deciding to proceed.
Effective long-term planning starts long before any discussions concerning the formation of the business
or entity. If an individual will be working with others in the ownership and operation of the business, these co-owners must be investigated to be sure that they will be able to fulfill their obligations. This might include reviewing the individuals' finances, and also any potential problems that may have happened during other business ventures.
Once this has been done, the owners will need to decide how they wish to set up their new endeavor. Each type of entity will have different tax consequences, so it is crucial that individuals understand which is best for their specific situation before moving forward. Additionally, these various options will also have different rules regarding the personal liability of the owners for any debts of the business. Failing to limit this liability could result in owners being forced to pay for any financial liabilities out of their own pockets if the business ends up not being successful.
After deciding the type of entity for the business, the owners will also need to draft documents that describe how it should be run on a day-to-day business. This way, if any disputes arise between the owners, there is a system in place that states how these disagreements should be resolved.
Business owners also need to be sure that they have procedures that discuss the potential loss of a partner or the ending of operations. This can state who would retain ownership of the business concepts, as well as how the individuals would be able to divide the assets and debts that would remain after the business has closed.
If the business is a family-owned enterprise, the owners may also need to be sure that they have considered what would happen should they pass away. This ensures that the entity can continue operations, and reduce the arguments that may arise between family members.
If you have an idea about a business you would like to create, or have questions about the type of entity best for your situation, you should speak to an experienced business law attorney. An attorney will be able to address your concerns, and assist you in creating a comprehensive plan that protects your interests.
Article provided by Gauntt, Earl & Binney LLP
Visit us at www.geblawyers.com