The Epoch Times is reporting that according to the National Federation of Independent Business this is the second month of rising optimistim for US small businesses. With small businesses making up a majority of our nations business community, it's important that we're showing optimisim in these coming times. If there was ever a time to start a business the time is now. Small businesses supporting small businesses support our economy and make it stronger, something that is needed in a time like this.

If you're looking to start a small business, we can assist in that, whether you want to start an LLC or a corporation, and remember only one person is needed in order to open up either of these business types.

Farmers markets have become a new breeding ground for new business.  A recent LA Times articles points out that more consumers are hungry for fresh fruits and produce.  For new business that are starting up and testing their new products, it may be a good idea to protect your business and assets by forming a LLC or forming a Corporation.  Many business that start up, do so by a sole proprietorship.  In doing so, much of the liability falls square on the owners themselves.  Therefore, if somebody were to be injured or hurt from one of your products, your personal assets such as your home and car are vulnerable to a lawsuit.  To protect your personal assets, it is imperative that you form a LLC or corporation so that you are protected. 

Once you have formed your LLC or Corporation, then you can operate your business knowing that you are protected in the event of a lawsuit.  The article points out that it may be difficult to join these Farmers markets since the demand is so great.  Therefore getting in may mean offering products that are different.  Therefore getting your company off the ground will require some good business strategy and protection.  Therefore protect yourself with a LLC or Corporation.

One of the best parts of forming a Corporation or Limited Liability Company is that it provides the owners personal liability protection.  Actually, this is one of the main reasons for forming a Corporation or LLC. 

When running a sole proprietorship, the responsibility of the company is squared onto the person running the business.  Therefore, if a customer gets hurt from any negligence related to the operation of your business, your personal and business assets are liable to a lawsuit.  However, if you file a Corporation or LLC, your personal assets will be protected.  In running your business, the individual working for the Corporation or LLC is not obligated to pay any debts or claims against the company.  Only the business assets and what assets the individual brings to the Corporation or LLC is vulnerable to a lawsuit.  Therefore a creditor can't legally sue for your personal assets such as your home or your car. 

There are exceptions to this liability proection however.  Actions done by an individual while directly working for the Corporation or LLC can make this individual vulnerable to a lawsuit.  These exceptions include events such as the person directly injuring another person, if the person co-signs or guarantees a loan, co-mingling assets between the business and person, or fraud. 

To keep your business affairs separate from yourself it is vital that you maintain separate bank accounts.  Do not pay for business expenses using personal accounts.  It is a good idea to maintain good bylaws and a operating agreement depending on the business type. 

Although, the liability protection protects you as a person from any debts and obligation, you must also protect your business as well.  There are many types of liability protection that you can obtain for the business.  Like most insurance, fees can vary drastically depending on the coverage and provider.

You can read more at our Limited Liability for LLC and Limited Liability for Corporations pages.

This is a question that comes up constantly.  How do I choose between filing a LLC or Corporation for my small business.  For starters, the LLC and the Corporation will provide the exact same liability protection for your small business in the event of a lawsuit.  So know that you’re protected no matter what type of entity you choose. 

In choosing between the two, you’ll need to know what your goals are for your business.  If you’re content with running your small business and have no intentions of growing your business in the fortune 500 company, then you may be fine with a LLC.  LLC’s are generally easier to operate for small businesses and afford the ease and flexibility so that you can concentrate on other things. 

However, if you have bigger goals in mind, then a corporation may be best suited for you.  If you plan to raise capital and sell partial ownership of your company to raise fund, then you have the flexibility to sell shares and ownership of the corporation. The distinction between a S and C corp is that a C corp, the corporation is taxed twice and the S corp has pass through taxation.  Which will be best for you will be determined on how it will affect your taxes.  So consulting a tax professional will be a must. 

Still choosing the type of entity that best suits your needs may seem daunting at first but it really is fairly simple.  There may be more to which type of entity is best for you but when it comes down to it, ease of use, taxes, and growth are the main criteria in choosing which entity will be best for you.  You can also consult the LLC learning center and the corporation learning center for more advice on this matter.