Whether you are starting a new business or have been operating for years, corporations, limited liability companies (LLCs), and certain partnerships can provide peace of mind while maintaining flexibility. When operating a business as a sole proprietor, you are personally liable for all debts of the business. This can include loans in the name of the business or any judgments from a lawsuit against the business. Forming a legally recognized “corporate” entity such as a corporation, LLC, or limited partnership can help insulate you from liability. What does this mean? If you operate an LLC that incurs a debt, the creditor can only collect against the LLC assets (i.e. the creditor cannot take the house you own in your own name). We have represented many area businesses, from tool and die manufacturers to building contractors, from banks to physicians. We can help you decide if some form of corporate entity is right for you and, if so, what type of entity best fits your needs.
Many individuals who are laid off or fired for reasons beyond their control can collect Unemployment Compensation for a period while they are looking for a new job. Some enterprising individuals take this time to go into business for themselves. It sounds like a great plan. The person has the time to form the new business because he or she is unemployed and the unemployment compensation benefits to help pay bills until the business is running. The idea of someone picking himself or herself back up and creating his or her own business is quite noble and romantic. For many, that is part of the American dream. Unfortunately, that spirit of entrepreneurship may lead to a trap. Continue reading