Wanna incorporate your biz but don’t know where to start or why you even need to?
When it comes to legal stuffs and things, let’s face it: A lot of entrepreneurs would rather gloss over that part of their business. Paperwork is boring. There are a million and one reasons why you don’t think you need it, especially when your business is new. When you’re starting out, you might think, “Which legal entity is for me? I can’t decide. I probably don’t need to worry about it right now. I’ll revisit it later,” or “I don’t need that – I’ve only made $10!” or quite simply, “I’ve actually made more than the fake money that Jill is holding in this picture, but I can’t imagine a scenario in which I will get sued.”
Unfortunately, as our expert attorney Donata Kalnenaite points out in this video course, “We are in a sue-happy society.” So, it’s better to protect your business now than to be unpleasantly surprised later. We are talking about that and more in the latest Founding Moms Community video course 27! What does this course cover?
Peeking Behind Those Scary Legal Terms
In the FMC course 27, Jill and Donata will happily teach you:
- What a “legal entity” means, and how it affects you if you’re a sole proprietor or in a partnership
- “Which legal entity IS for me, then?” They’ll break down and discuss the different types:
- The difference between an S-Corp and a C-Corp, and if you need to be one or the other
- What an LLC is
- Why you should decide what type of corporation you want to be the first time, instead of switching between one or the other later (hint: it costs money and time).
- Why legal template services may seem like a quick-fix solution now but may cost you dearly later
- What operating agreements are and when you need to use them
- And why you should never co-mingle your assets (if you’re forming that bad habit, best to stop it now. Keep those business and personal accounts separate, ladies)!
Paperwork, Who Needs It? I’ll Get To That Later.
Like many of us, Jill never thought it would happen to her. When she was running her second business, she sold a product in which she couldn’t fathom that there was any conceivable issue with it: “It literally slipped on and off the ankle; it wasn’t breakable. Until I got a phone call from a very angry customer…” The customer’s child had been scratched by her “no-problems-here” product. She was (luckily) able to remedy the situation, but all it takes is one phone call. Just one angry customer to flip your business upside down.
It all seems like something that can be dealt with later, but it can get scary very quickly, especially when later becomes right now.
The bottom line is that you could have millions of customers who love you, but one who does not. And the one who does not is going to try and make your life very difficult. In the long run, you’ll end up spending way more money than you would have if you just filed some paperwork.
Even if you’re just making $10, you’re going to want to make sure that your papers are neat and orderly. Filing paperwork with your state is necessary even though it’s something that no one wants to do, but it’s a vital step in building a business. Especially if it ever came to something that needed to be settled in a court of law (you need to show the court that you care to have an LLC, for example, and that you care about that same LLC). Especially if it’s decided that you need to have an audit.
Audits are no fun, so why leave yourself open to one if you can avoid it?
Why Do I Need to Decide Which Legal Entity Is For Me?
Legal entities separate personal assets from business assets. Whether you decide you need an S-Corp or an LLC, it puts a barrier in place so that (if you ever do encounter a client or customer who wants to take you to court) they can only go after your business assets. They won’t be able to touch your personal items, like your car or your house. Which makes life a bit better, wouldn’t you agree?
And while you’re at it, you’ll want to make sure you have your other ducks in a row: Do you have an employee or do you have an independent contractor (didn’t think there was a difference – there sure is)? If you have an office, do you have legal rights posted for all of your employees to see? If you have a website, are your terms and conditions listed (this one’s a big must-have) where visitors can find it? Think you don’t need contracts because all your clients love you, you just want them to be happy, and you don’t think either one of you will want to bother with filling out that pesky paperwork? (If we haven’t made it clear, paperwork’s generally your friend.)
Okay. I’m Ready To Decide Which Legal Entity is For Me.
Yes, we know there’s a lot to understand and it can seem overwhelming, but don’t worry! Donata will walk us through her tools, tips, and tricks to understanding legal-ese, breaking down complicated terms and conditions, and getting your business assets nailed down so that you can feel safe and secure… even if you think that you don’t need it. (Spoiler alert: You really, really do, plus you’ll likely want to keep your car and your house.)
I know you can do it. She knows how you can do it. Don’t miss this wildly helpful video course.
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