If you’re one of many small business owners experiencing robust company growth, you understand how things can change with your success. The expansion of your operation is a great thing. However, growth comes with a new set of challenges. One of those challenges is making sure your legal business structure is appropriate for your business moving forward.
Expect the Change – But Get it Right
As your business expands, entity restructuring is one of those growing pains. Throughout this process, however, keep in mind that the way your business is set up in the eyes of the law has a domino effect on everything else you are able – or unable – to do. Tax liability, business loans, regulatory compliance, and your own financial liabilities rely heavily on having the proper structure in place.
Once your structure is set up, the last thing you want to do is start the process over again in a few years. Legally, this would be akin to re-starting your business from scratch. As you can imagine, this represents a major disruption in your ability to run your business and make a profit. Getting the restructuring process right the first time can help you avoid:
- Excessive taxes
- Loss of productivity
- Losing personal assets in a lawsuit
- Missing out on potential funding
- Auditing and accounting risk
- Legal and tax trouble
- Lots of stress
How Should My Business Be Structured?
Which business structure is right for you will depend on a lot of factors. How likely are you to be sued? Are you doing business internationally? Do you have business partners? What is your expected revenue? How many people do you employ? These and other questions will help you determine whether you should be structured as a sole proprietorship, LLC, partnership, corporation, s-corp, or something else. It’s a complicated process that warrants some personal attention from an expert.
Where Can I Find Help?
The only way to ensure the you’ve chosen the proper structure and set everything up the right way is to use an experienced attorney. They know the federal, state, and local requirements for doing business. They understand tax law, business and personal liability, and more. After all, it’s more than the success of your business on the line: it’s your financial well-being, your reputation, your personal assets — even your freedom to do business at all.
As you can see, entity restructuring has some far-reaching implications. If your business is growing and you’ve ever wondered about your current structure, call an attorney today to examine your current and future needs. You’ll sleep better tonight.