We began working with smaller companies almost 40 years ago. But, back then, our efforts were exclusively aimed at developing new products these companies could manufacture, market, and sell. (We also worked with much larger firms, developing new products, processes and manufacturing schema.) But, many of our smaller clients ran into problems. Not with the technical matters, but with their management and financial affairs. So, we decided to begin working with these firms to help shore up their capabilities in these areas so their great products wouldn’t wither and die because the other parts of the company were sick.
Obviously, if you are just starting out, you need to determine the legal form under which you want to operate. Should you remain a sole proprietor or partnership? Or become incorporated/form an LLC? Each has their own tax situation- some pay corporate taxes (and then you must pay taxes on the money you take out of the company), others pass along profits to you directly, and still others let you allocate profits and losses among partners. Choosing the right entity is a critical consideration.
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