TURN YOUR PASSION INTO A FUNCTIONING BUSINESS: 1. Obtain an Entity. Every business needs to establish a legal entity for the following reasons: a. Tax Benefits- An accountant can utilize your entity to write off your expenses to reduce your tax exposure. b. Liability- An attorney can utilize your entity to protects your personal assets and reduce your legal exposure. c. Credibility- A business entity demonstrates experience and professionalism to the public. 2. LLC vs. S Corp Decide which business structure is right for you; an LLC or S Corp. An attorney can assist you to consider what type of entity meets your needs. 3. Create an Operating Agreement. After obtaining an entity, it is time to draft and sign an operating agreement. An operating agreement will ensure that all members of the company are in agreement with the intent and principle of the business. In addition, this agreement: -Carves out intellectual property. -Delegates responsibilities and time commitments. -Plans for purchasing future equity. -Sets and determines expectations. -Addresses how each member will be compensated. -Allocates possible venture capital funding.
Posted on: Wed, 10 Dec 2014 20:42:18 +0000
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