Will I Personally Be Liable For All My Business Debts?
If you do not set up your business the right way, you will be liable for all your business debts. If you are the sole proprietor, you will be responsible for the debts of the business. If you set your business up with a corporate structure, you will not be personally liable. You may, however, go get a business loan, for example, and the paperwork will say that you will be personally responsible if the business accrues any debt which it does not pay in a timely manner.
If A Company Consists Of Myself And A Family Member, Do We Even Need A Contract Or An Operating Agreement?
You need to be careful when working with family. There are a lot of successful businesses that are run by family members but it is a different dynamic. In business, things get heated when family members think that they are not getting a fair share. It is imperative to have written agreements, whether that be for ownership interests or for the management of what titles people get and what type of obligations come from those titles.
If there are hurt feelings when agreements are being drafted, then you know right away how it is going to be if an issue pops up. You need to be even more conscious when dealing with family members because you have an emotional dynamic with them.
When Should I Incorporate My Business?
The ideal time to incorporate is before you start to run your business. If you have number of clients and you are operating as a sole proprietor, you might already have exposure to liability. Some businesses may be able to go back and fix that, retroactively, and some might not. Sit down with an attorney and go over the type of structure you are going to have and the type of exposure you might have. Talk to your accountant, a tax attorney, and a business law attorney before you actually start your business or hire employees. If you’ve already started your business, you still can make sure that you limit your liability from that point forward. You may be able to go to your customers or vendors and update your contracts. The other side may sign it or they may not.
For more information on Personal Liability For Business Debts In Florida, a case evaluation is your next best step. Get the information and legal answers you are seeking by calling (772) 242-3600 today.
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