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PVW Law: Starting a New Business - I’m Pperating. What Now?

planningMATTERS • with pvw law

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This is the third in a series of articles addressing issues confronted by entrepreneurs starting and evolving a new business. This article focuses on changes to your business. As your business grows and changes, there are a variety of things to consider. The following summarizes a few of the basics.
 

A good employee handbook (and following it) can provide protection against numerous employment claims. The law in the employment arena is constantly evolving and handbooks should be kept up to date.

Upon the addition of employees, workers’ compensation insurance is required. In addition, review and reconsider your employee benefits. What worked just for you may not work as you add employees. Consider health insurance, retirement plans, incentive plans, wellness benefits, vacation and time off as well as other benefits.
 

As a business grows, it may need more expertise or more money. Either may result in taking on a business partner. Adding a partner means that you no longer have complete control over your business. While many investors require ownership, this can be done in a way to avoid impacting your day-to-day business operations.
 

It is common for businesses to operate in more than one state. During the growth of your business you may expand into new states. This is an exciting time, but does require some homework. States will often require you to obtain permits, tax ID numbers, pay sales or use tax, pay payroll taxes and register to do business in the state, among any additional requirements. The penalties for missing some of these steps can be expensive.   
 

As your business grows and evolves, consider protecting its assets (as well as your personal assets). 
If you add a new division, new product or new investment type, it may be best to establish a separate entity. A separate entity may provide both liability protection and tax advantages. With every significant change to your business structure, a review of insurance should always be on your radar.
 

Reducing taxes becomes important as your business grows and evolves. The tax plan that drove the particular entity choice at the beginning of the process should be revisited annually.  There are numerous tax savings opportunities that may be found in a careful evaluation of the applicable taxes and the approach to and structure of operations.
 

It is important that you review the entirety of your business on at least an annual basis.  One of our previous PVWLaw articles focused on the details of that annual review process.  Those articles are available on our website or you can email info@pvwlaw.com to request a copy.  Generally, we recommend that, on an annual basis, businesses should review insurance policies, tax status, important contracts, employment relationships, employee benefits/retirement plans, business succession plan and the estate plans of the owners.
 

For more information visit www.pvwlaw.com

-end- metroMAGAZINE

 

 

 

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