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FAQs

Frequently Asked Questions

Answers from an experienced business law attorney in Marietta

Following are some frequently asked questions and answers about business law in Georgia.

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What do I need to know if I am going into business for myself?

A:

The first step is to develop a detailed written business plan. Include sections on:

  • Product or service to be offered

  • Capital requirements

  • Operating costs

  • Ownership and control

  • Profits and losses anticipated

  • Labor and employment laws

  • Potential liability exposure

  • Insurance needed

  • Tax consequences

  • Regulatory requirements

  • Administrative issues

  • Marketing strategy

Next, seek professional advice by developing relationships with a business attorney, an accountant, an insurance agent, and a commercial banker.

Q:

What form of business entity should my business be?

A:

There are several choices. The simplest and most inexpensive entity is a sole proprietorship. At the other end of the spectrum is a corporation, with several other alternatives in between, such as:

  • Sole proprietorship

  • Corporation

  • General partnership

  • Joint venture

  • Limited partnership

  • S corporation

  • Limited liability company (LLC)

  • Closely held corporation

  • Not-for-profit business

A major difference between the entities is whether or not the owners are personally responsible for the liabilities and debts of the business. There are also major differences in the tax benefits available to the owners. A competent business attorney should be consulted to ensure you select the best form of entity for your personal and business needs.

Q:

Why do most small businesses fail?

A:

Statistics show that the majority of small businesses fail. Improve your chances of success by avoiding the most common reasons for failure:

  • Lack of a thorough, written business plan

  • Sharing ownership with too many partners

  • Lack of understanding of the business

  • Lack of understanding of the market for the product or service

  • Underestimating the competition

  • Underestimating the costs of doing business

  • Insufficient capitalization

  • Failure to anticipate tax consequences

  • Taking on too much work yourself and failing to delegate

  • Failure to seek the advice of professionals, such as a lawyer, a banker, and an accountant

Q:

What personal risks do I take when going into business?

A:

An owner of a business may be held personally responsible for the liabilities and debts of the business, such as:

  • Personal guarantees for loans and other obligations of the business

  • Unpaid business taxes, interest, and penalties

  • Long-term business obligations, such as office space and equipment leases

  • Lawsuits that name owners as plaintiffs or defendants

  • Government investigations

  • Criminal responsibility for your business actions or failure to act

A business attorney can help you avoid personal liability by helping you select an appropriate form of business entity when starting your business and by providing legal advice during its ongoing operations.

Q:

What are the tax liabilities for a business and its owners?

A:

Businesses and their owners are subject to taxes levied by federal, state, and local governments, including:

  • License fees

  • Payroll taxes and withholdings (both employer and employee portions)

  • Excise taxes on products, goods, or services

  • Franchise taxes

  • Permit and application fees

  • Sales and use taxes

  • Property taxes

  • Federal and state income taxes (business and personal)

  • Federal and state capital gains taxes (business and personal)

  • Penalties and interest for past-due taxes