Business Formation Attorney in Minneapolis, Minnesota

Starting a business is an exciting and sometimes daunting venture. It’s important to understand all required steps for proper business formation in order to make sure you are following the necessary regulations and meeting all legal requirements.  

If you are interested in starting a business, we at Engel Professional Association can help. Our business formation attorney can provide you with the legal assistance you need to further your business goals and help you make great decisions for your business from the very beginning. From our office in Minneapolis, Minnesota, we also serve clients in St. Paul and across Minnesota, including Maple Grove, St. Cloud, Woodbury, and Mankato. 

Choosing a Business Structure  

Starting a business is an exciting venture, but it can also be quite overwhelming. One of the first things you will have to consider when starting your own business is what type of business structure best suits your needs. There are four main types of business structures, each with its own unique pros and cons. 

Sole Proprietorship  

A sole proprietorship is one of the simplest and most common forms of business structure. It involves a single owner who has full responsibility over the company’s assets, liabilities, income, and expenses. All profits from the company belong solely to the owner, who is responsible for all taxes owed on those profits.  

Partnership  

A partnership consists of two or more owners who share in the management as well as any profits/losses incurred by the company. This structure provides entrepreneurs with added capital as well as more resources to tap into in order to help their businesses succeed.  

LLC  

An LLC (limited liability company) provides its owners with protection from personal liability while allowing them to operate their businesses much like a partnership or sole proprietorship would. LLCs also provide flexibility when it comes to taxation. Owners can choose how they would like their businesses taxed depending on their individual needs and goals.  

Corporation  

A corporation offers greater protection from personal liability than other forms of business structures since it is considered separate from its owners under the law (unlike in partnerships and sole proprietorships). However, corporations face stricter regulations when compared to other forms of entities. They must follow certain guidelines (such as holding shareholder meetings and filing reports with shareholders annually) in order to remain compliant with federal regulations.  

Steps to Take When Starting a Business 

Not only is it important to understand all the laws if you’re starting a business, but it’s also essential you follow the necessary steps. The business formation process usually consists of the following steps: 

• Evaluate your business goals. Before you jump into starting a business, it’s essential that you evaluate what your goals are and assess whether or not those goals are achievable. You may need to consult with a business formation attorney to get a roadmap for success prior to forming your business.  

• Start writing a business plan. The next step in setting up your business is writing a comprehensive business plan. A well-written plan will outline everything from the mission statement of the company, marketing strategies, target customers, organizational structure, operations process flow, financial projections, and more. 

• Conduct market research. After creating your business plan, it’s important to conduct thorough market research so that you can be sure there is an actual demand for your product or service. Researching similar businesses in your industry can help determine potential risks and provide insights into potential markets for expansion down the line.  

• Choose a business structure. When starting a new business, it’s essential that you choose the right entity type for both tax and legal purposes. Consulting with an attorney prior to selecting an entity type is highly recommended so that no rules are broken during the formation of your business.   

• Get an Employer Identification Number (EIN) from the IRS. Once you select an entity type for your organization, it’s time to obtain an Employer Identification Number (EIN) from the IRS. This EIN is used by companies to file taxes and report employee wages among other things.  

• Apply for business licenses and permits. Depending on where you form your organization, certain types of businesses may require additional permits or licenses before beginning operations. Again, consulting with an attorney prior to launching operations can help ensure all necessary permits and licenses have been obtained properly without any hiccups along the way.   

These are not the only steps you will have to take when starting your business, which is why a consultation with a business formation attorney may be necessary.