There are a lot of legal myths surrounding small and large businesses, and they can lead people into financial trouble. It’s important to understand the legal realities of running your own business, so you can avoid making costly mistakes. It’s up to you as a business owner to educate yourself on legal practices and the realities of maintaining a great business. When in doubt, always speak with a trusted lawyer or financial expert about the best process for your business.
Myth 1: There are a lot of tax breaks for starting a business
While it’s true there are a number of business deductions and tax breaks available for legitimate business owners, that doesn’t mean it isn’t costly to own and operate your own business. As a business owner, you’re responsible for a lot of taxes on behalf of your business. It can be complicated and downright confusing to learn the ins and outs of business tax law, and you need to remain in good standing with the IRS. While you are able to write off many business expenses as tax deductions, you need to do so reasonably and the correct way. When in doubt, speak to a tax advisor about the best way to file for your business.
Myth 2: You’re required to file an LLC or Corporation
A lot of would-be business owners are scared away from starting their own business because they don’t understand the different types of business formations. With types of formations like LLCs, S-Corps, C-Corps, and more, it’s easy to get confused. That being said, you aren’t required to legally file as any type of formal organization to be considered a business. Sole proprietorships are often the best options for small business owners, particularly those who are just starting or who are working alone. Speak to an attorney about the best formation for your business, if you suspect one is needed.
Myth 3: Having a legal formation like an LLC will protect my personal assets
It’s easy to assume a formation like a Limited Liability Company will protect your personal assets, but this isn’t true. LLC’s and other business structures do offer some protection, but like the name implies it is limited. If you run into an issue in which your LLC is involved in a lawsuit or other legal altercation, it is perfectly reasonable to assume your personal assets are at risk. This is why it’s so important to regularly speak with an attorney about protecting your personal assets and your business.
Myth 4: You don’t need a lawyer
A lot of business owners believe they can do everything themselves. They’re smart and capable, so why shouldn’t they be able to navigate all the filing, taxes, and more on their own? Not having a lawyer or at least a trusted advisor can lead to difficulties down the road. It’s easy to run into mistakes when working with legal contracts and complicated forms. If your business needs insurance, that’s an entirely different set of responsibilities. These are all things you should review with a lawyer to ensure you’re protected. Speak to an expert like the Rochester personal injury lawyers about your business.
Don’t buy into these legal myths!
It’s easy to be swayed into believing these legal myths surrounding starting a business. Whether you’re just starting your first business or you’ve been in business for a while, it’s vital you have a trusted lawyer help you with the complicated steps in the business process. Speaking to a lawyer can help you mitigate damages or avoid costly mistakes that could lead to the failure of your business. When it comes to the law, you don’t want to take unnecessary risks!