Businesses big and small need to consider how they want to organize. There are many different entity forms that businesses in New Jersey can choose from including corporations, partnerships and limited liability companies. Each entity form will have advantages and disadvantages for a business. People need to consider how each entity will affect the business in the future and its potential to reach a greater audience.
Online textbook company, Chegg, has recently announced that it plans to go public, thereby changing its entity form. Chegg was founded eight years ago and primarily rents college textbooks to undergraduate students who do not want to buy course books. The company has 180,000 books and has completed an estimated 3.7 million transactions with its five million visitors.
Chegg recently filed documentation with the SEC in order to offer stock options to public investors. According to the company, it wants to raise $150 million in its initial public offering to expand the business. Currently, the business is competing with many campus book stores — including at least 12 in New Jersey — that have started to offer students the option of renting their semesters’ books.
Business entity and other business formation issues can be complex and require expert attention. Depending on the type of business, the type of entity chosen and a variety of other factors, New Jersey businesses could be required to prepare and file certain legal documents before they can open for business. Furthermore, businesses may need the appropriate approvals from local, state or federal agencies before their business can operate. By understanding and preparing for these issues, New Jersey companies will put themselves in a better position to be successful.
Source: The Star-Ledger, “Textbook rental company Chegg going public,” Stacy Jones, Aug. 14, 2013