What Are the Advantages of a Sole Proprietorship?

sole proprietorship, Wheaton business law attorneysIf you are considering starting a business, you have a number of important decisions in front of you. One of the most critical decisions you will ever make about your business is what type of business structure you should choose. Your business structure will determine how you pay your taxes, to what degree your personal assets are at risk, your day-to-day operations, and more. Some of the most common business structures include S-corporation, partnership, limited liability company, and sole proprietorship. Each structure has its own advantages and drawbacks and the types of structure you choose will be based on your needs and business goals. In this post, we will be discussing the benefits associated with a sole proprietorship.

What is a Sole Proprietorship?

In a sole proprietorship, there is no legal distinction between the business entity and the business owner. A sole proprietor is solely responsible for the ownership and management of his or her business and does not share ownership with other partners. A sole proprietor receives all of the business’s income but is also responsible for the business’s liabilities, debts, and taxes. The business assets are not separate from the owner’s personal assets as with many businesses.

Sole proprietorships are a popular choice for many new business owners because establishing a proprietorship is often more affordable and less complex than other types of business structures. As a proprietor, a business owner has full decision-making power over his company. Of course, with this power comes significant responsibility. If the company incurs debts, the owner may be held personally liable. A business is automatically considered a sole proprietorship if it is not registered as another type of business. If you start a business and do not register your business with the state, you must pay your business taxes as a sole proprietor. A sole proprietorship may be the right choice for you if you want to start a low-risk business or you want to test your business idea before establishing a more formal business structure. Once your business starts to grow, you may choose to restructure the business as a corporation or other business type in order to meet your evolving needs.

Contact a DuPage County Business Law Attorney

Choosing a business structure is not a decision to take lightly. To discuss what type of business structure is best for you entrepreneurial aspirations or for other business law-related concerns, contact Stock, Carlson & Duff LLC. Call our office at 630-665-2500 today and set up a confidential consultation with a highly experienced Wheaton business lawyer.  

 

Sources:

https://www.sba.gov/business-guide/launch-your-business/choose-business-structure

https://www.investopedia.com/terms/s/soleproprietorship.asp

Reduce the Chances of a Wrongful Termination Lawsuit By Following These Tips

wrongful termination, Wheaton business law attorneyIf you are a business owner, you are probably an extremely busy person. The last thing you need is to deal with an employee suing you for alleged wrongful termination. Not only are wrongful termination lawsuits stressful and time consuming, they can also be extremely expensive. The average amount received by terminated employees in a wrongful termination or employment discrimination claim is just over $37,000. Most wrongful termination claims involve an allegation that the employer breached the employment contract or that the termination somehow violated a state or federal employment law. One of the best ways to avoid a discrimination suit or wrongful termination claim is to follow proper procedures when firing employees.

Make Sure All Employees Understand the Company’s Policies

Employees should be fully aware of the company’s policies regarding employee expectations, discipline, and termination. Many employers find that writing policies and procedures in a comprehensive employee handbook is one way to ensure that employees have a written record of rules and expectations. An experienced business lawyer is a tremendously valuable resource when it comes to formulating an employee handbook that gives you the best chances of avoiding a lawsuit.

Conduct Performance Reviews and Document Everything

Unless an employee has committed an especially egregious act that necessitates an immediate termination, firing an employee should be a last resort. An employee who is underperforming should be made aware of the ways in which he or she is not meeting expectations and given guidance on how to improve. Conducting regular performance reviews is a great way to let an employee know when he or she is missing the mark. Make sure you keep documentation of the dates of these reviews, what was discussed during the reviews, and how you and supervisory staff have made efforts to help the struggling employee.

Have a Witness Present at the Termination Meeting

If you have reason to suspect that the employee will not take the termination well or that he or she will attempt to bring a discrimination or wrongful termination claim to spite you, have a witness present during the termination meeting. If you have human resources staff, make sure a member of your HR team is present. If you do not have a dedicated human resources worker, ask a higher-lever employee to sit in on the meeting. A witness will be able to corroborate your version of the events if there is an allegation that you said something you did not actually say during the meeting.

Contact a Wheaton Business Lawyer

For help drafting employment agreements, company policies, hiring practices, and employment handbooks, contact an experienced DuPage County business law attorney from Stock, Carlson & Duff LLC. We will help you formulate company policies and contracts that give you the best chances of avoid any future business litigation. If you are the subject of a wrongful termination claim, we will aggressively advocate on your behalf. Call our office at 630-665-2500 and schedule a confidential consultation.

Sources:

https://www.entrepreneur.com/article/344232

https://www.inc.com/jeff-haden/how-to-fire-an-employee.html

Should I Buy a Franchise or Start My Own Business?

franchise, DuPage County business lawyersThere are numerous advantages to being a business owner. For example, it can be disheartening to work for another person or company. You may feel unappreciated by your superiors or frustrated at the inefficient way you are expected to do your job. When you own a business, you get to be your own boss. You control how your business is operated and managed.

However, owning a business also comes with a great deal of responsibility and liability. You may need to spend a tremendous amount of time and resources for only marginal growth—especially at first. If you are thinking about becoming a business owner, two options you may be considering are buying a franchise or starting your own business. There are benefits and drawbacks to both of these choices, all of which should be fully researched before you make a commitment to either path.

Do You Want Input and Guidance from a Franchisor?

The most significant difference between buying a franchise location of an existing business and starting your own business is the amount of control you have over the business. While you may still have power over some day-to-day aspects of a franchise, the major decisions about business practices, operations, marketing, and accounting will be made by the franchisor. Only you can know if this type of business relationship is right for you. Do you feel capable of developing your own business model from scratch or do you want guidance and oversight from a business organization that is already successfully established?

How Much Time and Money Are You Willing to Invest in Your Business?

Starting your own business gives you much more freedom than buying a franchise. However, this freedom comes with a remarkable about of accountability, both personally and financially. Take time to determine how much money you are realistically willing and able to invest in your business. Also consider the level of risk you are comfortable accepting. A great number of new businesses fail within the first five years of operation. Whether you are considering buying an existing business, a franchise location, or starting your own business, never jump into a new business venture without exhaustive investigation into what will be expected of you.

Contact a DuPage County Business Lawyer

Becoming a business owner is probably one of the biggest decisions you will ever make. To get the legal support you need to make your business ownership dreams a reality, contact Stock, Carlson & Duff LLC today. Call our office at 630-665-2500 to schedule a confidential consultation with and experienced Wheaton business law attorney.

 

Sources:

https://www.entrepreneur.com/article/286212

https://www.score.org/resource/should-you-buy-business-or-start-one-scratch