So you’re the owner of a small business that is doing well and you’re looking to grow the business. You need additional finance to fund the growth, but you’re not sure that you want to risk your own personal assets in pursuit of the expansion. Therefore you’re considering whether or not to incorporate your business? In this article I’ll explain some of the pros and cons of small business incorporation.
When you incorporate your business, you’re in effect, legally separating it from your own personal finances and giving the company a separate legal identity.
Prior to incorporation, you as the owner of the company, personally own the assets of the business. But, more importantly, you are also personally liable for its debts and liabilities. In simple terms, this means that should your business fail, your own personal assets are at risk!
Therefore, as we said in the opening paragraph, if you’re looking to expand your small business, incorporation may be appropriate for you as it protect your personal property and assets, should your attempts to grow your business fail.
Its common for business owners to try and grow their businesses to quickly, and when they do, cash flow becomes an issue. When cash flow becomes tight, it’s important that your personal assets are protected.
Here’s how you become protected.
Once your business is incorporated, your personal liability for its debts will be restricted to the amount of share capital your invested. Beyond your investment, creditors must rely on being paid from the value of the company’s assets. If there is a shortfall, the creditors lose out and you keep your personal assets!
Beyond your invested capital, you will have no further personal liability for the settlement of debts owed to your business’s creditors, unless of course, you have signed separate personal guarantees for any specific loans or debts.
Personal guarantees may be necessary where your business has little trading history, or where your balance sheet is not robust enough to provide sufficient guarantees to lenders. Personal liability protection is by far the biggest benefit to you as an owner when considering small business incorporation.
Another aspect to liability protection following the incorporation of your business is that your business is also protected from your own personal debts and cannot be damaged by your own credit problems. This is therefore a point you should strongly consider.
You should always be aware that as a shareholder of an incorporated company, you will always be last in line for repayment should your business come off the rails. All other creditors must be paid before you can receive your investment back.
Once incorporated, businesses usually find it easier to attract new finance to fund their growth. Therefore if you are seeking to expand your business, incorporating it could be the next logical step for you to take.
Incorporation sends a message to the financial world that your business will be around for the long term, it gives confidence to the lending institutions and therefore makes it easier to find additional finance.
The attraction of additional funds in the form of equity also becomes easier, because when you incorporate, your company has the ability to issue shares in return for cash. This share structure also simplifies the transfer ownership should you decide to sell your share of the business.
The separation of the business’s assets and liabilities from your own personal assets makes it much easier to value your business. Incorporating your small business is an important decision, a decision that should not be taken without seeking professional advice first.
Whilst there are significant benefits to incorporation such as those mentioned above, there are also important taxation implications to be considered and additional costs associated with a formal legal status.
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Help answer the question about businesses
What if businesses paid huge fines and lost their license for hiring illegal immigrants?Would that not solve the problem?
Punish the businesses that hire them. If we need them, then let them come, if we don't, punish the businesses and organizations that help them.
There is a whole industry set up in chuting people into the US from Mexico and its on both sides of the border.
I went into a public notary office in a predominatly Hispanic neighborhood and there were advertisements for getting a second form of ID in Spanish there.
I have a home business in health and wellness that is just under $200 USD to get started. As for time, it all depends on how much you want to earn.
There is no such thing as a good business that doesn't take time. You have to be serious about business if you want to earn an income. It's all what you do with it when you have it.
January usually has stocktake sales where retailers clear out xmas stock
July- i think there is an american custom of thanksgiving in july but u will have to check it out. Some people do it in australia but its not a big thing here.
August and Semptember im not sure about
December would be the biggest month and i see u did not include Christmas in your advertising. I would be using that occasion to search for businesses wanting to get in on your project. Its the biggest money making month of the year in terms of revenue for businesses and retailers. people buying presents and stuff.
Another idea would be for the businesses to put in a full page of deal, where coupons could be torn off the page. Things like 10% of shoes, or 15% of womens clothing. But that woul be up to the business if they would want to offer that.
lawnbusiness- Thank you so much. This little 1 or 2 minutes has inspired me so much.
ryan turner of turnergator lawncare and landscaping 21 clients and im only 14
If you're only really asking about training, then it would depend on the size of the business. If there's only about 1 – 10 people, then it would usually be the duty of the owner to train new staff, as he or she would be the person with the most interest in ensuring that everyone knows what they are doing. If you go into 10 – 30 or so staff, you'd probably have an operational or production manager who should take care of training.
Most businesses don't fail because of inadequate training though. As you pointed out, it's more about lack of planning. I ran my own small businesses for a few years, and I made sure to only hire people that didn't need any training!
Is your concern that businesses fail because of no proper training programs?
lol im gonna do that this summer, and ive got the same motivation as you. Beat out the mexicans! not to be racist.
I am afraid that this “stimulus” package will fail, just like President Bush’s “stimulus” package did. It will fail the individual and businesses all the same.
They will always fail due to the basic concept and idiocy of the idea as a whole… If government spending got us into this trouble, how will it get us out?
me and my bro made flyers today, were gunna start a lawn buisness…try and beat out the mexicans
An interesting and lengthy question that possibly deserves an equally lengthy answer.
I have worked for various companies. Everything from a family owned business that employed 3 family members, to a large Wall Street firm that employed roughly 40,000 people.
The issue that we have here is that in trying to regulate businesses, it's as if the government is trying to please everyone…and in doing so, they please no one. Like the saying goes, "You can't just be a little bit pregnant".
As a shareholder in a wide range of publicly traded companies, I have had a few of my common stocks go to zero, while the companies filed for bankruptcy (Lehman Bros. and WaMu are just 2 of them). Even though it cost me money personally, I am thinking that the best way to go about things is to simply allow the grossly mismanged businesses to fail completely. That is what capitalism is all about; survival of the fittest. The ones that made the biggest mistakes and have taken the biggest falls, are also the ones that were perhaps the greediest.
What bugs me MORE is that fact that the executives of these failed companies have now come come to the US government for money to keep their businesses solvent. And, while holding their hats in their hands and asking for a taxpayer funded bailout, they also have their friends in the backrooms writing bonus checks to themselves.
As another saying goes, "You make your bed, you have to sleep in it". These folks made their beds. Whether it be in the form of sub-prime lending, or using derivatives to squeeze more profits from their balance sheets, or manufacturing vehicles that American consumers can not afford because of the high cost of fuels, the executives were providing the leaderhip that led to this mess and at the very least, they should suffer the consequence of unemployment themselves.
Here's a novel idea. Before these HUG banking conglomorants became what they were, who was servicing those home mortgages in the past? The answer? Local banks! It used to be that when someone in Middletown USA wanted to buy a home, they applied for a mortage with the Middletown USA banks. The loan officer would review the application, look at their own banking records, verify employment with a simple local phone call, and possibly even drive to the property to inspect it to make sure that the home was worth what the buyer was paying (ensuring adequate collateral for the bank). Compare and contrast this rather old fashioned idea to what has been going on for that past 20 years! The mortgage lender is 2,000 miles away and has absolutely no idea who they are dealing with. For all they know, the property is a spruced-up double-wide trailer that they are lending $400,000 against. So, my question is…what's wrong with going back to basics and allowing these motgage banking giants to fail? There will be a void that would quickly be filled by…small town banks.
I could go on and on here. But I wish to make one more point. It's time that shareholders take back ownership of the companies. The boards of directors are often bloated with upwards of 15 people that do absolutely nothing in the way of corporate oversight on behalf of the real owners, the shareholders. Often times, these people serve on multiple boards of directors and are paid six figure salaries PLUS benefits from each company. For what? To rubber stamp their approval on everything that the CEOs say? It's time for a change…and the change needs to happen on the ownership level.
dude i charge 10$ a lawn 4 lawns a day and for 90 days i made 3,600$ in cash and im only 12
i need insurance or license
im fifteen and i charge 15 to 20 dollars per cut. I now own a truck, double axle trailer, a ariens 21 inch mower, a bob-cat walk behind, and a few echo trimmers and blowers. Im starting from the ground up and doing real well
Get crafty. Homemade things often sell like hotcakes to people for easy Christmas gifts. My mom and I are doing this.
You can get cheap unpainted photo frames from craft sections at stores and paint or fabric decorate them.
Go through the scrap fabric bin at your craft section and get fleece material. Make heating pads by sewing rectangles of fleece (these came range in size from 4×6" to a foot or bigger, it's all up to you) that you fill with plain white uncooked rice. Thse go in the micorwave for 2-3 minutes. You can also add various things to them like lavender for relaxation or orange peel for envigoration. Fennel seed also works well for filling, but rice is more readily available and cheaper. These sell very well.
You can get some unpainted ornaments from craft sections and paint them up, leaving room for a name, and do personalized ornaments.
You could do a bake sale, too. This is a good one! You can get cookie mixes and pre-made tear'n'bakes for $3 a dozen, and bake up a whole bunch of them. Do some in singles, doubles, five-packs and dozens. You could wrap them in colored saran wrap and ribbon (the colored Saran Wrap is around $3 but would do them all, and ribbon is around $1).
Contact local grocery store managers and explain what you're raising money for and ask if you cuold put donation jars by their registers. You can also ask if you can sell your baked goods and crafts at a table outside their store. Also, if you have a WalMart, ask them about a matching program. Many WalMarts will match whatever you raise in a set amount of time, like the day you sit at your table outside of their establishment.
A note about this: write down which stores helped you in any way, and be sure to write them thank you notes. They'll LOVE that, and be more likely to help you out if you need assistance again in the future.
f you're allowed to set up a table anywhere, be sure to have material about the program you're going to, maybe make up a poster or visual aid like you have to do in school. Be ready to talk about it a lot. People will really respond to a young, ambitious kid who wants to further their education and follow their ambitions.
Another thing you should do is make up a card to go with all your crafts and baked goods explaining that the proceeds from this purchase will go to send you to Germany as part of (Program Name)to learn about the culture and if they have any questions about it, to please call you, (Your Name) at (your number). People will see this and be intrigued, and I'd bet dollars to doughnuts you'll get donations AFTER the sale, as well.
If you need more ideas, go ahead and e-mail me, ok? wendy@kxaz.com
You both should sit down with a lawyer. It's a good idea to pay for the consultation to make sure you are both protected. I would think it depends on how the companies are set up (i.e. sole proprietorship, partnership, corporation, LLC, etc.) but it's definitely better to find out now and make arrangements if needed.
Good luck.
Try churches. Many businesses will not align themselves with religious organizations or donate to groups looking to convert innocent people to a religion they know nothing about and risk death by even speaking to you about a religion not sanctioned by the state.
WeeeelllI do have that kinda money to spend… I do want to open a strip club though..
any problem with mexicans bitch?
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