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Lufkin Legal Blog

The proper steps are vital when starting a business

Wanting to start one's own business is an exciting time. The desire can come about for many reasons, but whatever the reason, Texas residents who are ready to own their own businesses need to ensure that they take the proper steps for getting started and, hopefully, finding success. It can take a lot of time, effort and thought to make the best decisions, but it is often worthwhile.

First, individuals may want to determine what type of business structure will best suit their needs. Typically, individuals can choose between a sole proprietorship, general partnership, limited liability company or corporation. Each option has various pros and cons, including those relating to taxation and liability. Parties may want to remember that they can change their structure later if the need arises.

Getting a partnership agreement right

Often risky and challenging, starting a business can be among life's most exhilarating adventures. When the venture is a good partnership, its owners get to go through the experience together.

More importantly, they share their resources, experiences and skill sets, potentially making for a stronger business, and they also share legal and financial liabilities. According to Forbes, a strong partnership agreement can be critically important for a successful, harmonious business.

Mergers and acquisitions: Considering the best options for growing current enterprises or expanding into a new market

Many businesses find themselves ready to make big changes. In some cases, they may be looking to grow within their current field or expand into a new market. Some companies may find that the best option for them is to merger or acquire another existing business.

A lot of work goes into merging with another company or buying another company outright. When merging, two or more companies may decide to work together for mutual benefit and combine their available resources. When making an acquisition, one company will attempt to buy a target company by making an offer and, hopefully, making a purchase thereafter. The acquiring company then has the opportunity to continue building its strengths or work on strengthening current weaknesses by utilizing the resources and infrastructure obtained through the acquisition.

It is important to remember the business purpose during formation

Starting a company takes a lot of work. Though many Texas entrepreneurs may be ready to jump right into the actual operational aspects of their companies, it is vital that the necessary paperwork is completed. This paperwork could include having a business purpose in the formation documents.

Though it may seem difficult to think of an overall purpose for a business, that does not have to be the reality of the situation. In fact, it is common for businesses to use a relatively vague statement as their purpose that indicates that the company intends to participate in any lawful business activity. Of course, some entrepreneurs may not feel that a general statement works for their companies and may want to have a more specific purpose. Plus, some state laws require more information.

Does your adult child really need estate planning?

 

The simple answer to this question is a resounding "yes." Once your child turned 18, he or she became an adult in the eyes of the law, even though you may still see them as your child. Legally, you no longer have access to certain information about your child.

The importance of estate maintenance

An estate is made up of things you own, such as your home, car, physical and digital possessions, financial assets, and other important keepsakes. Whether you have an endless amount of property and assets or not, almost everyone owns something that will become a part of their estate when they die. If you don't establish and maintain a plan for your estate, you can leave a complicated mess for friends and family to handle when you are gone.

Some estate maintenance has to do with reviewing the people you've chosen to perform specific duties, like those who will receive benefits, make important decisions and those you chose as a guardian for your children. Are these individuals still alive and able to take on these tasks?

When should you consider restructuring your business?

Approaching a business restructuring is not an easy task, nor an easy decision. However, there are four factors Texas business owners should consider that can help them make their decision.

These four factors include:

Should I use a will or a revocable living trust?

When you begin estate planning, one of the first decisions you may need to make is whether you want to use a will or a revocable living trust. Both documents allow you to plan how you want your wealth distributed after you die, but they work in different ways.

Neither document is inherently better than the other, but one may be better than the other for your unique situation. Understanding the differences between the two documents can help you make an informed decision.

How could an estate plan save your small business?

Does your estate plan include your small business? All too often, when a business owner dies, their spouse and children must make difficult decisions about the future of the business. Without a will or succession plan, you may put your family’s finances, your business partners, and even your clients at risk.

 

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