One of the ironic aspects of this period since the financial crisis of 2008 is that, despite the difficulties people who lose their jobs have had in finding new employment with established companies, there have been record numbers of startups all over the country and New Mexico itself has not been excluded.
When starting a new business, the people forming it face certain decisions that will likely be critical either to the company’s future success or to the manner in which issues are resolved going forward by its forming or controlling partners. Some of these include the physical location of the business, whether the business owns or leases its offices or facilities and also what kind of business entity should be formed to operate the company.
In New Mexico, there are several options available when it comes to business formation. A single owner may opt for a sole proprietorship if he or she is trying to keep things simple and has no partners. There are a variety of partnerships (general, limited and limited liability) each of which apportion liability in certain ways to each partner and possess both specific advantages and disadvantages.
One may consider a variety of different types of corporations to form: a regular C corporation, subchapter S for a smaller entity and a professional or limited liability. The professional corporation shell is used often by doctors, lawyers and other enumerated professionals. There is also the option of nonprofit corporations for charitable or service organizations.
Determining which business type is best for your startup will involve considering primarily tax considerations and how the partners want to address issues of liability: to what extent do they want to personally shield themselves from future financial responsibility for the company’s obligations. Another major factor may involve whether some of the owners seek to have merely an ownership or equity interest in the company as opposed to a controlling one. This option is available to those who want to make a financial investment without being involved in the company’s operation, at least in the shorter term.
Because the specific circumstances of each person or group who wants to start a new business should dictate which business type is best to form, it is vital that you consult with experienced attorneys who can go through all of the options with those forming the company. The attorneys at the Law Office of George “Dave” Giddens have years of experience advising people on how to start a business and then prepare all of the necessary filings to actually form it. Decisions on business formation may in later years have significant repercussions as to how the company faces its financial obligations prospectively and how different members of its ownership resolve internal disputes. Contact Giddens & Gatton Law,amp; P.C. at 505-273-3720 or visit the website at www.giddenslaw.com. Call today to talk to attorneys who have helped entrepreneurs start businesses in Albuquerque and throughout New Mexico.
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