What Do Small Business Owners Need to Know?
As the owner of a small business you need to know:
What is the proper form of entity for my business? Should it be a C corporation, an S corporation, a Limited Liability Company (LLC), a Limited Liability Partnership (LLP), a partnership, or a sole proprietorship? Do you need protection against creditors or actions of partners or shareholders? Is it important to have income taxed on a single return as opposed to first being declared and taxed on a corporate or partnership return and then being taxed on your personal return?
Does my estate plan protect my family and allow my business to continue if I die or become incapacitated? If you do not have a Will, a Durable Power of Attorney, a Health Care Proxy (and a Living Will), then your family is not protected in the event that you die or become incapacitated, and the chances are your business planning has not made adequate provisions for these circumstances as well.
Do I have adequate insurance (life, long-term care, and disability) to provide for my family and allow my business to continue if I die or become incapacitated? Do you need key man insurance to protect the value of the business from the loss of your services if you die? Long-term care insurance and disability insurance covering you, as well as your employees, can be a tax deductible expense.
How do I pass on my business to my children/spouse/partners or get the value of my business to my spouse/children on my death or incapacity? Should there be a Buy and Sell Agreement between you and the other shareholders or partners, to assure that your spouse, children, or other beneficiaries can realize the value of the business at your death, or to assure you can be bought out if you leave the business or become disabled? Do you need to make other provisions for children not involved in the business so that the children who are working in the business can inherit and run the business after your death without interference from others?