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Laws That May Affect Your Business Organization

 

There are many laws that are applicable to owners of small businesses. It is best to consult with professionals to determine which laws will be applicable to you, what permits you will need to commence business and where to go to comply with the various rules. Your attorney should be able to assist you in complying with labor laws such as the employment of minors, illegal aliens and workplace safety rules. Your accountant should be able to assist you in filing:

Income tax returns

Franchise tax returns

Employment tax returns

The time for payment of withheld and employers share of employment taxes

Unemployment tax returns and payment
Sales Tax Reports and Payments
Take a look at our Small Business Tax Center created in association with the I.R.S.
Your attorney may be able to help with requirements for business licenses including special licenses for particular businesses as well as building codes and permits for remodeling and zoning laws, health department requirements and environmental laws.

Should You Have a Partner?

It is best to make your decision concerning whether to have a partner by preparing a "for" and "against" list. The most common reasons for joining with another person to start the business are:

There is safety in numbers. In other words, you have two heads instead of one to discuss and make decisions. In the words of Solomon: "Two can accomplish more than twice as much as one. If one fails, the other pulls him up; but if a man falls when he is alone, he's in trouble. And one standing alone can be attacked and defeated, but two can stand back-to-back and conquer. Three is even better, for a triple-braided cord is not easily broken."

You will not need to be at the business at all times. You will have someone else who will be there to share the load and permit you to take a vacation and have sick time.

You will also have a highly motivated co-worker, not just someone who is earning a paycheck.

Partners can also be advantageous when they have complementary skills.

It may be necessary to have a partner to contribute capital and share the risk when things do not proceed as planned.
Some of the arguments against having a partner are:

You will have to share the rewards if the business is successful.

You will lose total control over the business, particularly if you and your partner have difficulty in making decisions.

You will have to share the recognition that will come if the business is successful.

A partner can be a disaster if his or her judgment is not good.

You run the risk of a falling out and perhaps the necessity of one partner buying the other out if you do not get along.
Some of the things to consider in deciding whether a particular person will make a good partner are whether you have similar work habits, similar objectives concerning how to run the business and whether your strong points are similar or complementary. For example, different capabilities permit you to spread the workload and provide better coverage for problems.

Different capabilities may permit you to give each partner a veto over important decisions in his or her area of expertise to help maintain stability and eliminate conflicts. Finally, you may want to consider whether you should have a buy-sell agreement in the event of a disagreement, and how the purchaser will pay for the portion of the business he or she is buying (and whether you should fund the buy-sell agreement with insurance in the event of the death of a partner).

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