If you go into business for profit with someone, and if you don’t create a company like a corporation or an LLC, then your business automatically will be a partnership. However, a partnership does not give you any asset protection — you are 100% liable for the debts of the business — and it also gives each other partner the power to sign a contract that legally binds the business, even without your permission or knowledge.
Please visit the latest issue of Valley Business Front March [PDF link] for Keith Finch’s latest legal perspective on business pitfalls.
And if you’re interested in learning more about how to choose the right type of entity for your business, join us at our next round of Shark Bites this month.
In a recent article in the Roanoke Times, I discussed with reporter Yann Rannaivo the first steps a startup business should take to protect itself from legal liability and secure legal protection for its intellectual property. This blog posts expounds on the brief thoughts I shared in the Roanoke Times by providing further detail on those key first steps a technology business–or any startup–should pursue to protect its legal interests.
Starting a new business brings with it a lot of excitement and a lot of legal issues. Maybe you need a non-disclosure agreement with your suppliers to protect your trade secrets, or a transfer of ownership agreement to ensure that you own the copyright to the software created by the independent contractor you have hired. Before you do all that, however, you need to get your legal house in order by forming a business entity.