Introduction to Business Formation

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Navigating the Steps of Business Formation

Proper business formation prevents potential future issues, saving time and money in your entrepreneurial journey. In this part of the course, we cover the necessary steps, from discussing potential partnerships to hiring key professionals such as accountants and lawyers. These experts will guide you in defining the type of business entity you should create and assist in defining your business's legal terms of ownership.

Introduction to Business Formation – Transcript

Let's say you're running a lemonade stand, and you sell a glass of lemonade that makes someone sick, and now they want to sue you for it. If you haven't created a legal business entity for your business, they could come after you. Not only for the money that you've made with your lemonade stand but also for your personal assets.

By turning your business into a legal business entity, you'll be able to separate your personal assets from the legal assets of the business, and you'll be able to open a business bank account. If you're thinking about becoming an entrepreneur, you should know that there's a lot of hoops that you need to jump through when taking your business legit.

How will you discuss what everyone's roles, responsibilities, and portions of ownership will be? How will you put them all together in a legally binding document? Once you have all that organized, how will you clear the legal and logistical hurdles of filing your business with the government? And preparing your business to do business? Surely there's some help available for all of this, right?

Not to worry — we'll be covering everything that an entrepreneur should know about the formation of their business and this section of the course.

Hey everybody, Will Scheren here from Small Business Startup Guide by TRUiC. This video is part of a larger course dedicated to helping small business owners cut through the noise and get to the essentials of starting and operating their business. If that sounds like it would be really useful to you, be sure to like and subscribe.

We spent the first section of the course discussing how to plan your business's success. And how to make enough initial branding decisions for you to be able to bring your business to life. But now that you have a plan and you're organized, what's the first step you should take to make your business idea a reality?

Well, we've been doing this long enough to know that if you don't take care of a few important steps early in your entrepreneur journey, later down the road, you could find yourself spending lots of time and potentially lots of money correcting issues that could have been prevented if you would have simply formed your business correctly.

In this section of the course on business formation, we'll start by covering what you should consider when discussing partnerships with any potential entrepreneurs that you would consider partnering with, including a method for dividing ownership.

Then we'll discuss hiring an accountant and lawyer. These people will help you decide the type of business entity you should create for your business, and they'll help you legally define the terms of ownership for your business into Articles of Organization or Incorporation and an operating agreement. These documents are items that you'll want to have completed before filing to become a legal business entity and getting a business EIN number, which we're going to walk you through in this section of the course as well.

By the end of this section of the course, you'll have everything that you need to get a business bank account and start processing transactions for your business.

This video is part of a step-by-step course that gives business owners all of the essential information to start and operate their business. We've provided a link for you to get access to all of the free and discounted business tools we mentioned in the course below this video. Be sure to like and subscribe to get more of this content.

Well, guys, that's what we're covering in this section of the course. We'll see you in the next video, and if you have any questions, let us know.