Businesses are built out of different circumstances and rise up to be multi-national corporations. In some cases, a company for many reasons decides to lay off some of the workers and they end up being unemployed. This can push you into starting that business you have always been shelving. Once you are on the right track to starting the business, you have a solid plan in place and goals which the business has to achieve in the set timeframe.
It is very important for a small business owner to start off on the right foot and this means the financial and legal aspects have to be put into consideration. Taxes and other related fees have to be at the top of your priority list if the business is going to launch as planned.
The Legal Structure
A common question asked during business registration is whether you are the sole proprietor of the business or there are other shareholders. Being a sole proprietor is simple when your business is small to medium sized. However, as the company grows having a co-proprietors might just save your business. It acts as a legal cover as far as lawsuits and litigations are concerned.
It also improves your credit rating as the board will act as guarantors for any loans made to the company. At the same time, not all companies require corporations. It might be expensive for the company and you might not need it. The best way to work out this kind of arrangement is to spell out the capital or the labor equity that each person has put in.
Pay Your Taxes
Factor in the taxes when making the companies business plan. This will help you know how much tax you have to pay and the timeline you should pay it in. The law provides for a period of time to pay the taxes and penalties thereafter. If the company has entities, then they should also begin paying their taxes as soon as they start earning.
Consider Insurance Covers
Think carefully on the issue of insurance and acquire it at the right time. Most companies start and pay insurance policies they do not need and end up loosing on large sums of money. Get an insurance cover when you already have your first employee and not before.
Liability insurance is crucial if you are selling products or services. Evaluate the risks and if you are likely to get sued for the smallest mistakes, it is high time you got the insurance cover.
When you are employed, your employer covers some of your taxes and you cater for the rest. This however changes when you are self-employed since you cater for the whole amount. Be sure to set aside money for your own taxes to avoid getting penalties.
Make Sure Your Clients Pay You
A business stays afloat because the clients pay for the goods and services. Make sure that the clients pay you for the goods they get without fail. Depending on the type of business, draft up a contract which requires the clients to pay you 15-35% of the total cost before the services are rendered.
Jennifer King is a renowned corporate lawyer and has written numerous books on liability assessment in businesses. To know more about business debt reviews talk to her and get the best advice on the queries you might have.