Are you are looking to create your own carpentry business or expand your already existing carpentry business? If so, it is vital that you take great care in deciding which business structure will work best for your business. When you decide on which business structure to use for your carpentry business, there is so much to consider. More importantly, you just want to get on with doing what you do best, carpentry, instead of having to learn the ins and outs of each business structure available to you. You need not despair, with a few simple steps you will be well on the way to creating a business structure that is right for your business.
- Read an overview of all the business structures available to you;
- Choose the two business structures you believe to best suit your situation;
- Learn about these two structures in more depth;
- Seek the advice of a legal professional; and
- Create a business structure for your business.
By following these five steps, you can be confident that the business structure you create will be the right one for you. The overview mentioned in step one can be found here. Finally, it is possible that you do not have the time to follow these five steps right now. Do not despair. As an example, we will see a discussion of how a company business structure could be best for your carpentry business.
Should I choose a Company business structure?
The predominant benefit of a corporate business structure for your carpentry business is that it will protect your personal finances from those of the company. Also, a company can be continued in perpetuity and can quickly change hands if you wish to sell it or move on. Furthermore, a company can allow you to raise capital through means that are not available to other business structures. However, there are several drawbacks associated with a company business structure, predominately, the cost of its creation and the strict statutory requirements surrounding the day-to-day running of the company.
A company is considered to be its own separate legal entity. By this, it means that any financial debt incurred by the company will remain with the company only. As a result, it gives the owner a substantial safety net in running the carpentry business, and allows for business expansion despite the aggressive competition. If something goes horribly wrong, you will be safe in the knowledge that that your personal wealth will be safe. Hopefully, this disaster never occurs, however, many business structures without this financial protection are hamstrung due to their owner’s fear of failure more than anything else. Therefore, by creating a company business structure, you will remove this fear altogether.
Also, unlike other business structures and because the company is a legal entity unto itself, it can continue into perpetuity. If you retire, the company will continue as if nothing ever happened, allowing your legacy to continue to thrive and prosper well into the future. Besides, it is also much easier to sell, buy or amalgamate a company than any other business structure, which is a great advantage for businesses looking to expand in the future.
All these benefits do come at a cost, however, as a company is quite expensive to both create and maintain. Also, throughout its existence a company will be required to comply with every changing legislation, which will determine its structure and the responsibilities of its officers. Winding up a company is also a very costly process, so once it is created it is very difficult to turn back.
If you are looking to create your own carpentry business or expand your already existing carpentry business, it is vital that you take great care in deciding which business structure will work best for you. Although this is a daunting task for many business owners, by following the five steps outlined above, you can be sure that you are choosing the correct business structure for your needs and aspirations. A company will provide you with financial security and exist in perpetuity, however, it will also be the most costly business structure to create, maintain and wind up. If you have any further questions relating to the various business structures to choose for your carpentry business, please feel free to call LegalVision for a fixed-fee quote.