You made the leap. You dedicated yourself to turning that beloved hobby or innovative idea into an income generator, and began building from the ground up. Up to this point it’s been just you (with maybe a little help here and there from friends or loved ones). Sales have grown and it’s time to take the next step.
You want to expand your business beyond the one-person show it has been, maybe hire an employee or find some contractors. It’s a big decision and a testament to your hard work. But where do you even begin?
What type of business is right for you?
There are different types of business entities, each with pros and cons and its own legal requirements. For example, if you’re still growing slowly, maybe a sole proprietorship is the right option. Or maybe a partnership structure, or limited liability company (LLC) better fits your needs.
Which path you choose determines some of the legal obligations, including what type of liability you as an individual have compared to the business entity, and rules concerning shareholders.
Different Louisiana departments require different information in order to register a business. You’ll likely need to check in with the Secretary of State’s office and the Department of Revenue. Then there are possible federal or local licenses to consider as well, plus tax forms. And don’t forget about the articles of organization or operating agreement required in some cases.
There is a lot to do, which means there is also a lot to potentially miss. That’s why many people looking to start a business enlist the help of an attorney to lead them through the process.
If you are considering hiring employees or paying contractors to help with some of the workload, you’ll have to consider additional needs. Contractors require a contract, for example, and a bad contract can leave you in a troublesome situation down the line. It’s important to ensure the language is not only legal, but clear and doesn’t leave space for serious issues.
Employees require their own tax forms, and often a payroll service to issue their paycheck. Employee policies, such as a handbook, should also be considered.
Any missteps along the way could trigger serious negative consequences, and at a crucial time in the life of your business. Getting some help ticking off these boxes allows you to focus your time and energy on what’s important: the actual business.