New Business Formation
When you research how to start your own business, many of the requirements and regulations can be a bit overwhelming. Rest assured, the team at Jerry Love CPA, LLC is well-versed in helping Abilene businesses establish a strong foundation. Whether you’re starting from scratch or are ready to transition to a different business entity, our team can help you make an informed decision and ensure you have the right pieces in place.
Jerry Love, CPA, offers new business formation services in Abilene.
As a first step in establishing your business, it is important to define a vision for your business. This includes short and long-term goals, setting a budget, and having funds allocated to important needs, which includes incorporation or tax filings, marketing, and legal processes. Many new business owners obtain funding from lenders or use their personal resources to begin establishing their business.
A budget is critical in determining how much you’d like to ask lenders for, as well as having a business plan prepared to share with investors or funding institutions. It may also be a good idea to shop different lending options, as each has different terms and benefits.
Selecting the Right Entity
After obtaining funds, the next steps you’ll want to take include obtaining federal recognition and selecting the appropriate type of entity. Each form of ownership available has various requirements, limitations, and benefits, so it’s important to understand the implications of each, so you can be sure to select which is most beneficial to your new business.
Sole Proprietorship – This is the default business formation designated to businesses who don’t register as any other kind of business. This formation gives you complete control of your business, which also means you’re solely liable for all business activities. Business owners operating under a sole proprietorship are personally liable for debts and obligations that pertain to your business. Sole proprietorships are a good option for business owners with a low-risk offering or those who want to test their business idea before taking more involved and costly steps to formulate their business.
Partnership – Partnerships are the simplest method of formulating a business with two or more people. Partnerships are a great business formation for business owners with multiple partners, such as accounting firms or legal groups. There are also methods of limiting liability between partners, to keep everyone independently accountable for their dealings.
Limited Liability Company (LLC) – LLCs are a more well-known type of business formation, as they separate personal liability from business dealings. In the event that a business suffers bankruptcy or is sued, personal assets remain untouchable. If your business is a medium- or high-risk venture, an LLC would be a good option to protect your personal assets from business dealings.
Additional Business Types – Larger businesses and non-profit businesses also have various formations, to include C Corps, S Corps, B Corps, Close Corporations, Nonprofit Corporations, and Cooperative. Each of these business types has subtle nuances between tax requirements/exemption, profit recognition, record-keeping requirements, etc. Because these vary greatly, our team is happy to discuss these nuances with you, if these business types are of interest.
Are you thinking about starting a business and want assistance establishing its formation? Jerry Love, CPA is here to help serve your business needs in Abilene and surrounding area. Please give our office a call today to schedule an appointment for a free consultation.