Autumn Witt Boyd is an attorney that specializes in registering copyrights, trademarks and advising clients on intellectual property matters.
Autumn Witt Boyd
(Photo courtesy of Autumn Witt Boyd)
Why should I form an LLC or corporation for my business?
- Your personal assets will be protected from a lawsuit involving the business.
- Your business appears to be more legitimate to your customers.
- There are tax benefits in some states.
- Corporate structure can help when raising business capital.
You can run your business without doing any corporate formation. If you’re solo, it is a sole proprietorship, and if you have partners it’s called a common-law partnership.
When deciding to form an LLC or corporation, consider two things — liability and taxes.
- An LLC [Limited Liability Company] or corporation can protect your personal assets — personal bank account, house, car — from being taken if someone sues you for something you do in your business or if you don’t pay a business debt. If you have an LLC or corporation and get sued, the court would only be able to take any bank accounts or business assets to pay the damages, not your personal assets. The most important reason to form a corporate entity is for the liability protection. Some businesses have higher risks of being sued than others. Since there are yearly costs to form and maintain an LLC or corporation, it is important to consider how much protection you need for the cost.
- An LLC or corporation may save you money on your income taxes. It is different in every state, so it is worth finding a local accountant who works with small businesses and can run the numbers.
Should I trademark my company name, logo or slogan?
If it’s valuable to your business, it’s worth protecting. If your company name, logo or slogan is an essential part of your business, investing in registering your trademark correctly with an attorney to get all the benefits of federal registration is money well spent. You can’t sue someone else who’s copied your trademark until it’s registered, so you put your company at risk by not registering. And, you’ll put other companies on notice of your trademark rights by registering since they will find your registration when they search the USPTO database. Your business will have some common law trademark rights just by using the trademark so long as no one else was using it first. Because of this, I often advise my clients to start using their trademark while they save to hire an attorney to register it the right way.
This article was written by Robin D. Everson for Small Business Pulse