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I’m Opening a Small Business. Do I Need a Lawyer?

July 30, 2021

When you’re starting a new business, you likely have a lot of questions on your mind. While you’re deep in the throes of developing and refining your product and unique differentiators, you also have to consider whether your business is properly structured so as to maximize your earnings and set yourself up for long-term success. Enter a Springfield business lawyer who uniquely understands the issues you’re facing: They can help you strategize for the road ahead, ensuring you’re covered no matter what comes your way.

Wondering how a business lawyer can help get your company off the ground? Read on to learn what’s most important when you’re just starting out.

Structuring Your Business

A business will generally emerge from a great idea, but the hard work lies in determining how to structure your business to best suit your needs. A business entity will generally involve a host of issues, from the type of legal entity you select to the owners and stakeholders that will take a share of its profits, and how profits will be divided should the company be a wild success and go public. 

Whether you wish to set up your business as an LLC or corporation, employ full-time workers or rely on independent contractors are just some of the questions your Springfield business lawyer will review and help you address. Some of the limitations surrounding corporations, such as that you cannot have more than 100 shareholders, that you must be based in the United States and that you can only have one class of stock, might be too limiting for the type of business you want to build. 

LLC or S-Corporation? Your Springfield Business Lawyer Can Help You Decide What’s Right for You

Determining whether you need an LLC or an S-corporation can be a difficult choice for a new small business owner, especially when you have little experience in navigating the consequential tax obligations that arise from whatever you choose. One of the reasons people prefer an LLC over an S-corporation is that you have more flexibility in how your company is managed. For example, LLCs don’t require shareholder meetings, director’s meetings, or minutes recording what shareholders discussed, while corporations do.

Another advantage to an LLC is that you have a lot of flexibility when it comes to splitting up your financial interests. LLC owners can divvy up profits and losses however they choose amongst their owners, while an S-corporation would require the company’s profit and losses to be allocated based on the ownership percentage of each of the parties. This can affect how you would record your earnings in an end-of-year income tax statement, which may or may not align with your ultimate business and wealth goals.

Speaking with a Springfield business lawyer who has a wealth of experience navigating these types of issues for successful startup clients is a sound approach for getting your business off on the right foot. Contact our offices today to learn more.