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How to Avoid Missteps When Incorporating a Business

Incorporating a business is essential in order to protect business owners from unnecessary risks, including potentially jeopardizing their own personal wealth due to business liabilities. There are some common missteps you should avoid when incorporating your business, including:

Selecting the wrong entity. There are several choices for incorporating a business, and you need to choose the right one for your individual situation so you can get the maximum benefit when it comes to taxation and asset protection.

Neglecting to execute a founders’ agreement. When there is more than one owner involved in a business, complications can arise if there is no founders’ agreement in place that dictates equity ownership and other provisions that are necessary to keep the partnership peaceful.

Incorporating too soon. If you incorporate your new business venture before you leave your old employer, this can cause problems, especially if there is a non-compete agreement involved. If your new venture relies on newly developed intellectual property, you must be sure that your former employer cannot lay claim to it.

Neglecting to follow the formalities. LLCs and corporations each have corporate formalities that must be observed in order to preserve asset protection for owners. Neglecting to follow these rules can result in opening yourself -- and your personal wealth -- up to business liabilities like unpaid debt and legal claims.

Failing to pay payroll taxes. When you are first starting a new business, it can be tempting to skimp on payroll taxes, but doing this will get you into trouble with the IRS, which can come after the personal assets of any business owners who are associated with payroll.

To avoid missteps in getting a new business up and running, contact The Dorcey Law Firm, PLC, for business planning legal services. Contact our Fort Myers law firm for your free consultation.

Categories: Business Planning
dorcey law firm
The Dorcey Law Firm, PLC - Fort Myers Attorney
Located at 10181 Six Mile Cypress Pkwy, Suite C, Fort Myers, FL 33966
Phone: (239) 330-6674
Local Phone: (239) 418-0169