Legal Issues for Second-Stage Companies
Types of Business Formations
As your business grows, you may need to revisit your choice of business structure—sole proprietorship, partnership, corporation or LCC. Choosing the right business structure to meet your needs, goals and growth can be a challenge.
Here’s a quick snapshot of the benefits for the most common business structures:
- Sole Proprietorship – Easy to set up, simpler tax filing process
- Partnership – Simple operating structure, tax benefits
- LLC – Personal liability protection, tax benefits, management flexibility
- Corporation – Personal liability protection, may be the best structure for seeking outside investment, can help reduce taxes
Your first step: Review the legal forms of business organization, and then weigh the pros and cons of each business structure to make sure your legal business formation continues to meet your businesses needs.
Maintaining Licenses and Permits
Be sure keep your business legal with the right legal agreements, record-keeping, licenses, permits and any mandatory reports that need to be filed with your state. The more you’re in-the-know about legal matters, the more smoothly your business will operate and the easier it will be to remain in good standing with your state.
Trademarks, Patents and Copyrights
Before you start the process of protecting your original work, do some research on the differences between trademarks, patents and copyrights to understand the protections each provides. When you’re ready to file a trademark or patent, visit the U.S. Patent and Trademark Office. Register your copyright at the U.S. Copyright Office.
Dissolving or Transferring Your Business
Businesses go through many stages, in some cases liquidating assets, filing for bankruptcy or selling or transferring ownership. Before it’s time to move on, seek professional assistance to help you develop a solid exit strategy.