Start-up companies face a lot of challenges. New business owners must resolve issues involving funding, entity formation and governmental regulation all while trying to get ahead of their competition. While many of these issues can be daunting, New Jersey businesses are overcoming these business formation issues and going on to be very successful companies.
Now, the state of New Jersey is trying to make it easier for start-up companies to open in impoverished inner city neighborhoods. Recently, the New Jersey legislature has approved an expansion to the Neighborhood Revitalization State Tax Credit. The bill has now been sent to Governor Chris Christie. If Governor Christie signs the bill, this tax credit will give businesses incentives to invest in low income areas. Under this specific bill, the program will include up to $15 million in tax credits for businesses.
In these difficult economic times, programs like these may be just what businesses need to get off on the right financial foot, especially in at-risk areas. However, there are other business formation decisions that can give new businesses a financial advantage.
These decisions include entity formation. By carefully considering and choosing its business entity, a business can give itself an overall advantage. Depending on the entity form chosen, business can see changes to their tax liability, personal liability, structure and organization. If the right decision is not made from the beginning it can cost the business money and scare off potential investors.
Entity choices range from a corporation, to a partnership to a limited liability company — with many choices in between. Each of these choices will have advantages and disadvantages that need to be carefully considered before any decisions are made.
Source: The Times of Trenton, “New bill sponsored by state Sen. Shirley Turner could benefit businesses and impoverished cities,” Alyssa Mease, June 1, 2013