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Starting a Business Overview

Starting a Business

There are many opportunities available to those who want to start a business and be their own boss. You may be wondering how to start a consulting business. Perhaps you're asking how to start a restaurant business. Whether you want to start a business from home, or open a corner store, you need to compare the advantages and disadvantages of the business entities available to determine which is best for your circumstances.

How to start business operations can be made much simpler and with minimal cost by using our professionally drafted preparation services. Starting up a small business should be done properly, after due diligence, in compliance with legal requirements, and with professionally drafted agreements to protect your interests. Whether you need an LLC operating agreement, partnership agreement, buy-sell agreement, bylaws, confidentiality and nondisclosure agreement, or any other form, we offer preparations services for all of your needs.

Starting a business with the help of USLegal's top quality preparation services is simple and inexpensive. There are various types of business entities to choose from. Choosing the proper business format is the first step. The most popular ways for starting a small business are outlined below to help you choose which format best suits your needs.

Choosing your Business type

Limited Liability Company (LLC)

  • A limited liability company combines characteristics of a corporation and a partnership. The owners of an LLC are called members. Members enjoy the limited liability of a corporation, but may have income taxed on individual tax returns, like partners in a partnership.
  • Limited liability company formation is fairly simple. There are fewer procedural requirements than incorporation. Starting a new business involves filing articles of organization with the state. Some states have other names for the document, such as a certificate of limited liability company formation.
  • An operating agreement is used internally to describe the contributions, rights, and duties of the members, tax treatment, and others issues related to business management.


Starting up a small business by incorporating provides various advantages. Some of the main advantages include:

  • Limited liability - The owners of the company, called the shareholders, aren't personally liable for corporate debts.
  • Taxation - Depending on the circumstances and individual tax rates involved, the corporate tax rate and tax benefits available may be advantageous. An S corporation election may be available in order to have income taxed at the owners individual tax rate when that's lower than the corporate tax rate.
  • Raising capital - Shares of stock may be issued to raise capital when needed.
  • Indefinite life span - A corporation will continue to exist despite an owner's death. The articles of incorporation and bylaws can specify what happens to a deceased owner's shares.

Corporations have some disadvantages. There are more legal, filing, and paperwork requirements. Forming a corporation begins by filing the articles of incorporation with the state. Additionally, other requirements apply, such as the creation of bylaws, notices of shareholder meetings, and SEC regulations governing publicly traded shares of stock.


Setting up a new company as a partnership has very few procedural requirements. Company name registration is often required in the local area where business is conducted if the trade name uses something other than the partners given names. Licensing may be required, depending on the type of business activity involved

Every partnership needs a written partnership agreement. This agreement sets forth the rules governing a partnership, but isn't required to be filed with the state. This agreement sets forth the contributions, rights, and duties of the partners. It also describes issues such as:

  • Tax allocation
  • Division of profits
  • Admitting new partners
  • What will happen if a partner leaves or dies
  • How disputes are handled

Sole Proprietorship

Starting a small business as a sole proprietorship is typically done through a DBA (short for "Doing Business As") filing, at a county office where the business is located. Licensing requirements may apply depending on the type of business activity involved.

Sole proprietorship is very popular with small home-based business because of the ease of reporting and its ability to be launched rapidly.

In a sole proprietorship, the risk for the owner's personal and jointly owned assets is unlimited. Even starting an online business may create liabilities. There may also be tax disadvantages, since profits are taxed on the owner's individual tax return, rather than using the corporate tax rate and tax benefits available to corporations. Start up business ideas must compare tax rates to determine the best option.

Let US Legal help you get your business started today!

Starting a Business FAQs

Any tips for how to start a business?

How to start a small business begins with choosing the business format that best suits your needs. The choice will depend on the circumstances of each situation, such as the owner’s assets, type of business activity, tax considerations, need to raise capital, number of investors and managers, etc.

  • Sole proprietorship - Starting a business plan as a sole proprietor may be a good choice if the owner has few personal and joint assets and a lower individual tax rate than the current corporate rate.

  • Limited liability company (LLC) – Ideas to start a business as an LLC are suitable when you want the limited liability protection of a corporation and don’t need to issue shares of stock to raise capital.

  • General partnership – A start up business as a general partnership offers ease of formation, with no formal corporate structure or organizational fees required. However, partners have unlimited personal liability. If you want to have limited liability protection for personal assets, a limited partnership format also exists.

Other options for starting a new business exist, these are just a few of the popular options. Other tips for starting a business are available on our site, along with our easy-to-use form packages and preparation services.

Startup business ideas should be investigated for the advantages and disadvantages involved. When opening a business, it’s important to comply with applicable laws. However, you don’t need to be a legal expert. How to start a successful business can be accomplished easily and at a low cost when you use a form package that’s been professionally designed by attorneys, according to the law in your state.

What type of small business start up is the easiest?

A sole proprietorship is probably the easiest to create, but it may not be the easiest to manage. How to start business operations involves few procedural requirements. First steps to staring a business this way typically begin with a "Doing Business As", or DBA, filing in a county office where the business is located, and licensing may be required of certain types of businesses. However, the owner may face various disadvantages:

a) Due to personal liability for all business debts, the owner’s personal and jointly owned assets are at risk.

b) If the owner’s individual tax rate is higher than the corporate tax rate, this can lead to lower profits. Corporate status may be advantageous, depending on how the owners’ individual tax rates compare to the corporate tax rate.

c) Because loans are based on the personal credit record of the owner, it may be more difficult to get loans and raise capital. A corporation may be preferable if you need to raise capital through the sale of stock shares.

Setting up a company should not be decided on procedural requirements alone. What is needed to start a business will depend on the needs of the business involved. Setting up a company is simple when you have a professionally drafted, state-specific form package with easy to follow step-by-step instructions.

Is Starting a Home Business Risky?

Forming a business like an S corporation, C corporation, or limited liability corporation can be completed easily and inexpensively by using an incorporation package for your state. US Legal Forms offers forms and form packages that let you form an LLC, form an S corp, limited partnership, or other form of business organization at low cost.

How is a business corporation formed?

If you want to start a business from home, it can offer various advantages. Staring your own business from home has perks, such as not commuting, lower overhead costs, being able to care for children or dependents, etc. As with any ideas for starting a business, the risks need to be evaluated. The risk will vary by the type of small business opportunities involved. For example:

  • How to start a consulting business may involve clients coming to your home, and you need to be insured against a client’s injury on your property.
  • The cost to start a business will vary depending on the type of goods or services you’ll provide.
  • Starting a photography business may require consent or waiver and release forms.
  • Starting a trucking business may violate local zoning regulations.
  • How to start an online business may require expensive hardware and software upgrades and security measures to protect and back up information.

Proper business planning must evaluate the potential liabilities. If you need help with starting a business, there are many resources. The Small Business Administration and local Chamber of Commerce are often good places to start. To start a small business from home, we have all the professionally drafted forms you need at very affordable prices.

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