When a person is forming a business in Baton Rouge, they must secure the assets needed to run their business. There are three general types of business assets business owners should be familiar with. One is tangible assets. Equipment and buildings are two examples of tangible assets. These types of assets are generally used in the regular course of business and depreciate over time.
Intangible assets are things such as a brand name, network or reputation — that is, things of value that are not physical in nature. They contribute to the overall value of the enterprise. One specific subset of intangible assets is intellectual property. This includes patents, software, trademarks and more. Copyright and trademark laws provide protection for these types of assets.
There are two primary ways a business can acquire assets: they can lease them or buy them. In general, for business purposes there are two primary types of leases — operating leases and capital leases. Operating leases are what most people think of when they think of renting something. The business doesn’t own the asset being leased, and thus is not required to maintain the asset or fulfill other obligations regarding the asset. Capital leases, on the other hand, can be compared to a loan, in that the business has ownership over the asset. This means the business is responsible for maintaining the asset and fulfilling other obligations regarding the asset.
If, instead of leasing, a business chooses to buy an asset, they can either do so with cash or through a loan. With a cash purchase, the business owns the asset outright. However, a loan allows a business to make smaller payments over a longer period of time.
In the end, it is important for business owners to think carefully about what types of assets they will need to run their business, and whether they will lease or buy these assets. Because these types of transactions often involve legal documents, it is important that business owners seek the assistance they need to understand them, so that the transaction meets their best interests. Business law attorneys may be a useful resource.