Entrepreneurs in New Jersey may benefit from learning more about the basics of starting a new business and how to choose the right type of structure for the new venture. For many entrepreneurs, the first and most effective step towards starting a new enterprise is to draft a business plan. People who need help with this endeavor may benefit from the resources provided at New Jersey Small Business Development Centers located in each county.
One of the most important decisions to consider when planning a new startup centers on which type of business structure to choose for the organization. Entrepreneurs typically choose between setting the business up as a sole proprietorship, a partnership, a limited liability company or as a corporation. Depending on the particular needs or operations of the business, each structure may provide unique benefits.
Some of the benefits of a sole proprietorship often include more control over income, lower expenses and startup costs. Partnerships are also easier to form and have lower startup costs as well. People who prefer less personal liability and more flexibility typically choose to form an LLC instead. Entrepreneurs often chose to choose to form a corporation when they want to limit liability, create unity of action through a governing board, make ownership transferable and have more options available for raising capital.
People who need help starting a business plan typically benefit from contacting legal counsel before making any final decisions. Lawyers may be able to provide entrepreneurs with insight and guidance that can help mitigate adverse outcomes as the business venture matures. Business lawyers may also be effective in helping ensure that adequate protections are included in new contract agreements as well.
Source: NJ.gov, “Business Basics”, September 16, 2014