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Forming A Business Entity: Why Size Doesn’t Matter

626 Summary: Say the word “corporation” to the average person and they’ll probably make the association of a substantial business: office buildings, boardrooms, stock deals, factories, an army of employees, and so on. In making that association it may never occur to someone who owns a business, no matter how small, whether already up and running or still in the planning stages, why they should have a business structure not all that different from what they pictured as the “big” company. T... Keywords: Article Body: Say the word “corporation” to the average person and they’ll probably make the association of a substantial business: office buildings, boardrooms, stock deals, factories, an army of employees, and so on. In making that association it may never occur to someone who owns a business, no matter how small, whether already up and running or still in the planning stages, why they should have a business structure not all that different from what they pictured as the “big” company. That business structure or entity might take the form of a Limited Liability Company (LLC), a close corporation, or a non-profit corporation. Almost any form of business enterprise you can imagine, from a corner deli to a plumbing and heating business to a business consultant to a one-truck trucking company, can benefit from forming one of those business entities. But wait, you say, my business is small or just in the embryonic stage. I’ve got a lot of expenses and I can’t afford the time or the costs of forming a business entity. There are two answers to that objection. First, you can call us at Harvard Business Services, Inc. or go to our web site at http://www.delawareinc.com and have a business entity well on its way to being formed in a matter of minutes. As to the cost, if you consider that even our premium service, which you may or may not need, costs less than a new desktop computer, the fact is you really can’t afford not to form a business entity. Here’s why. If you run a business, you can be sued. As this article was being written a family-owned drycleaner in Washington D.C. was being sued for upwards of $50 million because they lost the pair of pants to a customer’s suit. That’s an extreme example but it makes the point. If a customer slips on the floor in your store, if your truck backs over someone’s prized petunias, if your HVAC installation causes a short and damages someone’s home, you can be sued. And in today’s environment there’s a good chance you will be. But wait, you say, I’ve got liability insurance. That will pay for any damages if I lose a lawsuit. Really? Do you imagine the dry cleaner in Washington D.C. had $50 million worth of liability insurance? Do you think the attorneys representing the people suing you will be satisfied with the limits of your liability insurance? If you haven’t formed a business entity you are liable—personally. Your home, car, savings, furnishings, everything you own is at risk. Forming a business entity places a wall of separation between your personal assets and liabilities the business incurs. If your business is sued, that fact alone will likely give plaintiff’s attorneys second thoughts about going after your personal assets. There are a host of other sound reasons for forming a business entity as well, not least of which are the tax benefits. And, if you form a business entity under the laws of Delaware—you don’t have to live or operate your business in Delaware to do so—you’ll come out ahead in a variety of other ways too. For instance, suppose you want to leave the business, in this case the stock in the business, to your children. For business entities formed in Delaware, there is no inheritance tax on stock held by non-residents of Delaware. And that’s just one example. To learn more about the reasons why and the benefits of forming a business entity in Delaware, and doing it through Harvard Business Services, Inc., visit our web site at http://delawareinc.com or call us toll-free at 1-800-345-2677. 2 ) { echo "https://www.article-one.tryamillion.com/ARTNET/$file"; echo "$file"; echo "
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