Business

Starting a Business?

Ms. Crain guides new businesses towards a path of success. With an undergraduate degree in Marketing, Ms. Crain understands how important every decision is when taking that step of faith and starting your own business. From choosing a business entity to creating a legally sound employment manual, Ms. Crain can help you. Whether you are a sophisticated business investor or a first time business owner, Ms. Crain provides practical advice in corporate, tax, employment and regulatory issues. Contact Ms. Crain to ensure your new business venture begins with a solid foundation.


The Steps to Success

Success StepStarting a new business is exciting, but there are many decisions to make. Ms. Crain serves her business clients by guiding them in those decisions, including:

  • How do I choose the right business name?
  • What are my options for financing?
  • How do I set up a business plan?
  • Which type of business entity fits my goals?
  • What are the licensing and permit issues that I need to consider?
  • What should I consider when hiring and paying employees?
  • Should I obtain insurance for my business?

Choosing the Right Business Name

Company NameTypically, a business owner has an idea of what they would like to call their business. Name availability can be determined by contacting the appropriate state or county office, typically through the secretary of state. The business owner should also confirm that the name is not a trademark belonging to another party. Additionally, Ms. Crain works with the new business to ensure that the name they choose is a name that distinguishes them from their competitors. For example, if a potential business chooses a name that is reasonably similar to 500 other entities also open for business, Ms. Crain advises her client so they can determine if they want to proceed with that name or help them create a name that is unique to their business.


Financing and the Business Plan

Business PlanIn today’s market, many individuals are considering starting their own business. Ms. Crain guides her clients towards innovative solutions for financing. This includes things like rolling over investment funds into the business. Ms. Crain guides her clients so that tax consequences are limited. Further, the new business owner may want to obtain capital from investors or a financial institution. A business plan is usually required, and includes the following:

  • What kind of service or product the business will provide
  • Research that shows demand for the service/product
  • Start up costs and projections for at least one year
  • A solid marketing plan
  • Prospective Management and Staff
  • Financial plans
It is important to remember that with the new business, financial institutions are looking at the background of the individuals who are starting the business. They look at credit history, debt-to-asset ratios, and other businesses that the individuals might own. Ms. Crain, with her background in business and marketing, reviews all of the information and offers practical, real solutions to make that business package more attractive to potential investors.

Business Organization Forms

Business EntityThe potential business owner should be aware of the main business organization forms, their characteristics and the laws that govern them.

Sole Proprietorship:

A sole proprietorship when an individual starts a business. Many choose this form because it is a cheap and a common choice for one-person businesses. The sole proprietor owns all of the business assets, but it is important to note that the owner also has unlimited personal responsibility for business liabilities. The owner is taxed on income from the business at applicable individual tax rates.



General Partnership:

A general partnership is formed when two or more people carry on as co-owners of a business for profit. The partners usually control the business; they co-own the assets and shares in profits and losses. Like a sole proprietor ship, each general partner is personally liable for business-related obligations. Partnership profits are taxed on each partners’ individual tax returns.

Limited Partnership:

A limited partnership is different from a general partnership because one (or more) general partner manages the business's operations and one (or more) limited partner contributes capital but has no substantial management control. The limited partner's liability is limited to the extent of its capital contribution to the partnership; that is, the limited partner is not personally responsible for partnership obligations.

Limited Liability Company:

Many new businesses choose to form limited liability companies because they combine elements of partnerships and corporations. For example, the LLC typically has tax benefits that are more attractive than a corporation, but affords similar protection as a corporation has. The owners, called members, only risk losing money that has been invested into the LLC and only the assets of the company are used to pay its debts. Members of the LLC report profits and losses on their individual tax returns.

Corporation:

A corporation is a separate legal and taxable entity from the owners of the corporation. There are statutory formalities in setting up a corporation that vary from state to state. Most states have a website for their Secretary of State outlining these requirements. The owners of the corporation are typically protected from the corporation's liabilities. A professional corporation is required to be formed by law for specific professions, i.e., attorneys. The filing requirements are similar to filing a corporation.

In Texas, we have the benefit of being able to file online the necessary documents to form a LLC, Corporation, or Professional Corporation. Ms. Crain can assist you with the formation and in many instances, your business can obtain its legal existence within 24-48 hours.


Licensing and Permits

LicensingIn setting up and running a new business, licenses and permits are typically required. Texas has an excellent online directory of information at www.texasonline.com. This is an A-Z directory of licenses, permits and registrations by name or type.


Employees

EmployeesHiring employees can be one of the biggest challenges for new businesses. Ms. Crain recommends that a good employee manual is established from day one of the business to protect the business and the employees. State and federal law govern the actions of business owners and managers not only in the hiring process, but also governs their actions in the control and supervision of those employees. The business owner should be aware of the relevant legal standards during the hiring process to avoid discrimination, observe privacy rights, and avoid hiring illegal immigrants. Additionally, employers need to make sure they observe all other state and federal laws, including child labor laws and age discrimination laws. Further, the IRS has specific standards for determining who is in fact an “employee”. These standards should be followed to comply with all state and federal taxation requirements. Regarding compensation, the US Department of Labor regulates and enforces many of the laws on employee compensation. Relevant labor, employment and compensation considerations include a consideration of applicable Texas law and applicable federal law, including:

  • Minimum wage law under the federal Fair Labor Standards Act (FLSA)
  • Vacation pay, sick pay and holiday pay
  • Severance packages
  • Pension plans and the Employee Retirement Income Security Act (ERISA)
  • The Family Medical Leave Act (FMLA)

Non-Compete Agreement

Additionally, Ms. Crain can help you look at your particular business and determine if a non-compete should be put into place to protect your business, and the privacy of those that your business serves. This is especially true when your business has additional privacy rights to consider, including HIPAA.


Insurance for the New Business and Its Employees

InsuranceInsurance is important to protect the assets of the company. In choosing the right policy, business owners need to analyze potential risk. In certain instances, insurance can be mandatory. Insurance for a business may include:

  • Commercial policy
  • Property insurance
  • General liability insurance
  • Malpractice or professional liability insurance
  • Product liability insurance
  • Business interruption insurance
  • Business vehicle insurance
  • Umbrella policy
Insurance for Employees may include:
  • Workers' Compensation
  • Health insurance
  • Life insurance
  • Disability insurance


Contact the Law Office of Deborah L. Crain, P.C.

If you want to discuss starting a new business we are here for you. Contact the office today at 281-565-5777 or info@deborahcrainlaw.com for answers to your business questions.

Get in Touch


281.565.5777
10707 Corporate Drive, Suite 100 Stafford, TX 77477

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