INVESTORS’ CORNER: Starting a business? Things to consider…

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When starting a new business there are many things to contemplate. Here are a few issues to address.

• Choice of entity: Choosing the proper business entity is very important and a requisite first step in starting a new business.  Prior to forming a business entity with the Secretary of State, an analysis of the business plan and goals should occur. Different entities offer specific advantages that must be aligned with the unique business. 
•  Is a LLC right for you? LLCs (Limited Liability Companies) are common and frequently misunderstood.   Flexible in nature, a custom Operating Agreement must be drafted. The Operating Agreement dictates the terms of the company, and without such a document the business could be in peril. 
• Raising Capital: How do you intend to fund your business?  Developing a strategy for funding is necessary and can dictate details of your business. For example, if you wish to sell stock then forming a corporation is likely preferable to a LLC. Regardless of your funding plans your LLC operating agreement or corporate bylaws should address your plans in great detail.
• Exiting your business: how do you plan on exiting your business?  Few contemplate the end when starting a business. Such exit considerations include: Do you intend to sell your business to your partner, or keep ownership within your family? How does your partner plan on buying you out, with business capital or through independent means? The decision is yours and with the help of a skilled attorney you can plan accordingly.   

Attorney Craig Morgan is a member of Metrolina Real Estate Investors Association, www.MetrolinaREIA.com, which provides education, networking, and mentoring to investors in the Greater Charlotte area. He can be reached at [email protected], (www.providencelawcarolina.com).