Many business owners go broke simply because they are confused about what the exact legal structure of their operations should be. Denoting your legal status is an important issue that needs to be addressed and included in your Plan.
When I started my business, I researched legal issues such as:
- Licensing and bonding requirements
- Permits local and state
- Health, workplace or environmental regulations
- Special regulations covering your industry or profession
- Zoning or building code requirements
- Insurance coverage
- Trade marks, copyrights and/or patents
This legal form should never be considered without the advice and guidance of your attorney. The reason is that if one partner leaves town, the other is responsible for all of the business debts. If a partner accrues debts on a business credit card, then all partners are liable for these debts.
Dr. Pat’s Inside Secret:
Before you take a partner, I suggest that you ask yourself; “Why do I need a partner?” If it’s money, then go to a loan officer. If it’s for management needs, then hire a manager. Think about what a partner will do for you, not what you can do for them and seek the advice of your attorney.
All of these legal forms may change with time; new forms come in and previous forms go out. This is why you must turn to your attorney for advice and guidance about what legal form is best for your business operation. Never assume that you can operate without their professional assistance because paying their fees upfront is much better that paying later on for the trouble that can evolve without this legal advice.