Starting a Business—The Basics

America is the land of entrepreneurship and opportunity—long-touted by the world as the land of the self-made man. While it’s always a political debate as to just how true this is, it is true that the United States continues to be a place of opportunity for startups, regardless of changing tax codes and political debate. According to a Brookings Institute report, “new and young businesses have generated 40 million jobs in the past 25 years representing 20 percent of gross job creation.” More than three-quarters of high growth businesses are young businesses—and these “generate 88 new jobs a year compared to 2 to 3 jobs for all businesses on average.” Starting a Business—The Basics

Despite political rancor that the economy can’t support the American dream, statistics point to the fact that even during the 2009 recession and during its subsequent aftershocks, entrepreneurship in America is alive and well. It’s true that the number of startups has fallen dramatically—but this is mostly because of reductions in home equity and restrictions on lending, according to the Brookings Institute. Now, however, three years after the beginning of economic recovery, it just may be time to get a business off the ground.

When starting a business, the most important first step is to hire the counsel of a qualified business attorney. According to the U.S. Government Small Business Association (SBA), choosing whether or not your business should be a Limited Liability Company (LLC) or a Subchapter S Corporation (S-Corp) depends on what your business needs are. This could be the most important decision you make as you choose to incorporate your company. An LLC, according to the SBA, “is a business structure similar to a sole-proprietorship or a general partnership,” while “an S-Corp is a corporation that has received the Subchapter S designation from the IRS. “ Deciding which of these is best for your business is complicated, and should best be undergone with the assistance of an experienced business attorney.

If you or someone you know is considering setting up a small business, don’t go through it alone. Contact a dedicated Chicago-area business lawyer today.

 

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