Start Up Capital

Start up capital is the money needed to start a new business. It can be used for an office space, permits, licenses, inventory, product development and manufacturing, marketing or any other expense. Funding can come from, your savings, a bank in the form of a business loan, or from an investor, group of investors, or venture capitalist(s).

Business Structure

Sole Proprietorship

A big advantage of a sole proprietorship is the high level of autonomy the owner has to run his business. There are no other owners to divide profits with, which allow a sole proprietor to use company funds in any manner. Sole proprietors have relatively few formalities to adhere to and very little regulation from federal, state and local government. However, a major disadvantage of a sole proprietorship concerns the lack of liability protection for the business owner. This means a sole proprietor has a personal responsibility to pay every business debt and obligation.

Partnership

A partnership of two or more individuals has the ability to collaborate. Partners can share the responsibility of managing the company and share ideas with other partners. Also, partners are not required to file income taxes as a business entity, meaning each partner reports his share of business profits and losses on his personal income tax return. On the other hand, a partnership offers no personal asset protection for partners of the business. A partner may be even liable for the negligent acts of another partner. If the partnership’s business assets do not cover an obligation, a creditor may pursue a partner’s personal assets as compensation for the business debt.

Limited Liability Company

A limited liability company is a hybrid business entity that provides members with limited liability protection from company debts and obligations. Also, members of an LLC are able to divide company profits in any manner, regardless of ownership in the company. This flexibility allows an LLC to allocate profit