Here in Lafayette, we have a great view of the Flatirons just down Baseline Rd. Boulder, Colorado—the startup capital of America—is a destination for many like-minded entrepreneurs looking to start their businesses.

While these individuals may have great ideas and even greater aspirations, there can be many hurdles along the way, not the least of which is just getting started!

Business Name

First and foremost, you need to have a name for your business. You should take great care in naming your business, because it can be costly and time consuming to change your name once your business has already matured. Additionally, you need to consider how your customers will perceive your business after they see or hear its name.

For example, if you are starting an insurance business, you likely want a professional sounding name to make a great first impression of trustworthiness and accountability to your customers. However, if you are opening a bar and grill, it might be acceptable—or even preferred—to inject subtle humor into the name of your business.

Type of Business

The type of business entity you create is no small matter. There are a lot of tax implications related to the type of business you create. Some common types of businesses include:

  • Limited liability corporation (LLC)
  • S-Corp
  • C-Corp
  • Sole proprietorship
  • Partnership

Risk, Liability, Profit, and Debt

In addition to your tax structure, the type of business you form also heavily determines your risk of liability. For example, sole proprietorships offer the least protection against liability as opposed to other types of businesses.

Partnerships will reduce your liability a little, but they still won't severely limit your liability. To decrease your exposure to risk, you need to form and LLC, S-Corp, or C-Corp. 

Furthermore, profits and debts are also determined by your business structure. A sole proprietorship will leave its founder with all of the profits and debts, while a partnership will divide your profits and debts. 

Operating Agreements and Bylaws

You will also need to iron out any operating agreements—financial and managerial rights and duties—before getting started. A failure to do so could create problems in the future with your employees and partners. You need to specifically state who owns which responsibilities, and you need legal documentation to protect yourself.

Tax ID

You also need to acquire a tax ID number, especially if you intend on hiring employees. Your tax ID, as the name implies, is used to pay your taxes. This is one of the most important steps of forming your business, because a failure to adhere to tax laws will kill your business in less than a year.

There are many intricacies and specifics involved with started a new business, and if growth and success is you goal, you want to be sure everything is done right from the beginning. While there are parts that you can do yourself, having an lawyer helping you is advisable.

Professional counsel will help you avoid any costly mistakes that could cause serious setbacks for the future of your business. If you have questions, or need help starting a business of your own, feel free to contact us!