Due to the consequential nature of this decision, you should carefully weigh the pros and cons of various business structures to better ensure that your ultimate choice aligns with your goals, financial situation and the level of personal risk that you’re willing to accept.
The most common legal formation structures for small businesses include corporations, sole proprietorships, limited liability companies (LLCs) and partnerships. Each has its advantages and drawbacks, and each caters to a different kind of entrepreneurial vision.
A sole proprietorship is the simplest form, wherein a business is owned and operated by a single individual. This structure is straightforward to establish and offers an owner complete control. However, it does not provide a legal distinction between the owner and the business, meaning an owner’s personal assets could be at risk if the business incurs debt or is sued.
Partnerships, function much like sole proprietorships, but they’re owned by more than one individual/entity. And, like sole proprietorships, they are pass-through entities wherein owners are taxed directly on their personal returns for the company’s activities.
An LLC is a popular choice for small business owners because it affords liability protection with the tax benefits and flexibility of a partnership or sole proprietorship. This structure can be more complex and costly to set up and maintain, but it's often worth it for the liability protection and flexibility in management.
Corporations are the most complex and formal business structures. They provide the strongest protection in re: personal liability but come with increased regulatory requirements and taxation rules. The administrative burden and cost of maintaining a corporation can be significant and isn’t usually ideal for most “traditional” small businesses.
The right structure will set your company’s foundation for operational success, so carefully weigh your options before committing to one option over the others.
]]>While Florida boasts fewer mandatory insurance requirements than many other states, this does not equate to a free pass. You still need to obtain business insurance – for legal reasons and to protect against potentially devastating loss.
There are only two in Florida. Businesses must ensure all company vehicles have auto accident coverage. Employers with four or more employees must obtain workers' compensation coverage to protect their staff members.
Professional liability insurance can do much to protect you and your company if a dissatisfied customer or a business partner files a lawsuit against you. Essentially, these policies shield against litigation, providing peace of mind and the resources to navigate legal challenges.
A cyber attack or data breach can shatter customer trust and compromise your business interests. However, a cyber insurance policy protects against financial loss through a data breach. It can protect you against the worry and stress of running a business in the tech-savvy world.
Florida has a fair share of inclement weather and natural disasters. Commercial property insurance can help in the face of damage and loss due to nature, theft or vandalism. A commercial umbrella policy also offers benefits, such as boosting your current business insurance coverage.
Addressing potential risks through insurance coverage means you can launch your operations confidently. Speaking to someone familiar with the local business environment and associated laws can help you with other critical steps.
]]>Unfortunately, contracts are breached all the time. It’s important to understand how this happens and what steps you can take if it happens to you. To start, here are three different ways that the breach could occur.
In some cases, the other party may talk to you in advance and say that they’re not going to uphold the contract. Maybe they simply refuse to abide by the terms. This sometimes happens when the other party got confused or wasn’t even sure what they were signing in the first place, even though they should have known.
A minor breach is when the contract isn’t fulfilled perfectly, but the main stipulations are still met. For instance, a parts supplier says that they will send you 1,000 units by Monday. They do send 1,000 units, but they show up on Wednesday. This could still harm your company if it means that your own production slows down and you’re unable to meet demand.
A material contract breach is when things go entirely wrong and you don’t get the correct products. Maybe nothing is shipped to you at all. Or perhaps you get the wrong items. Say that you ordered 1,000 graphics cards because you assemble computers, but you received 1,000 sound cards.
These are just a few examples of how a contract could be breached. If this happens to you and your company, take the time to look into your legal options to pursue justice.
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