Business woman discussing fundraising opportunities.

Effective Nonprofit Fundraising Tips For Board Members

Being a board member for a nonprofit organization means that you will likely be called upon to assist with fundraising. While it may be easy to write a check, the organization benefits greatly from fundraising. In addition to raising capital, fundraising also increases awareness about the nonprofit’s mission. Fundraising may also generate non-financial assets for the organization in the way of volunteers and donations of goods and other items. In the blog below, our South Carolina business attorneys review tips that can help your board members become successful fundraisers. 

Fundraising 101 for Nonprofit Board Members

Eight tips that can help you become an effective fundraiser as a board member for a nonprofit include:

  • Education Board Members — Fundraising is a learned skill. Some board members may not be as effective at fundraising because they have never learned these skills. Share fundraising ideas with other board members. Consider hiring an experienced professional to train board members on fundraising techniques.
  • Set Quarterly Goals for Fundraising — Fundraising should not be a “one and done” annual event. Instead, set quarterly goals for fundraising to encourage board members to engage in fundraising throughout the year.
  • Set Up a Fundraising Committee — Choosing the best fundraisers on your board to sit on the fundraising committee. The committee can help train other board members and help them improve their fundraising skills, in addition to planning key fundraising events.
  • Seek Donations for Silent Auction — If you are unable to host a large event, ask your friends, family, and associates to donate items for a silent auction.
  • Contact Past Donors — Obtain a list of lapsed donors from the organization. Some people who have donated in the past may have gotten busy and forgot to donate again this year. A call or letter may be all it takes to renew the contribution. 
  • Cash in on Favors — When someone asks how they can return a favor, give them a pre-printed donation card and request that they donate to the nonprofit as a way to return the favor.
  • Develop an Event Follow-Up Plan — Holding a successful fundraising event is just the beginning. You need an event follow-up plan to ensure that all donations are received. Also, connecting with event attendees after the event can help encourage them to make additional contributions and possibly work to raise money for the organization on their own.
  • Ask for Matching Donations — Contact companies and business owners that you know and ask them to match donations for a specific event or period. For example, a company may agree to match donations to the nonprofit made by its employees or match a percentage of the profits raised by a specific event held to benefit the nonprofit. Companies can place maximums on their matches to help them feel more comfortable and willing to participate. 

Contact Our South Carolina Business Attorneys to Discuss Your Nonprofit

Our South Carolina business attorneys work closely with nonprofit organizations on numerous issues, including fundraising. Schedule a consult today. Before you embark on a fundraising activity, seek legal advice from an experienced business lawyer to ensure you comply with all state laws and regulations for fundraising in South Carolina. 

Two business professionals looking over an operating agreement.

Five Reasons Your LLC Needs an Operating Agreement

Have you recently formed your Limited Liability Company (LLC) or are you interested in forming an LLC for your business? If so, you will also need an Operating Agreement for your LLC. While South Carolina does not require an LLC to file a copy of one with the Articles of Organization, there are several reasons why your company needs an Operating Agreement. A South Carolina business formation and planning attorney can help you draft an Operating Agreement that meets your company’s needs and protects your interests now and in the future. 

What is an LLC Operating Agreement?

A Limited Liability Company may have one member (owner) or multiple members. Even a single-member LLC can benefit from an Operating Agreement.

An LLC Operating Agreement is a legal document that governs the ownership and operation of the company. The information contained in one varies, but typically includes sections related to membership, capital contributions, organization, management, voting rights, distributions, membership changes, and dissolution. It can also be tailored to meet your company’s specific needs. 

Five Reasons to Create an LLC Operating Agreement

1. Limits Personal Liability

One of the common reasons for creating an LLC is to limit the members’ personal liability for company debts and obligations. Without an Operating Agreement that clearly defines the separation of the business entity from the members, a court could determine that the business is not a separate entity and hold the members personally liable for company debts.

2. Resolve Disagreements

Disagreements related to business decisions and daily operations may arise between members. An Operating Agreement can contain rules for resolving disputes between members. It also provides structure and rules for the company that can quickly resolve a dispute without litigation or mediation if the dispute involves a specific issue governed by the LLC agreement, such as the exit of a member or a member’s authority to make certain decisions for the LLC.

3. Membership Changes

The Operating Agreement dictates how membership changes are handled. For example, what happens to a member’s interest if the member dies? Can a spouse claim an interest in the LLC in a divorce? The agreement may dictate that the other members have the right to purchase the interest instead of allowing the interest to transfer to another person outside of the company.

4. Default Rules Govern the LLC

If you do not create an Operating Agreement for your LLC, the default LLC rules in South Carolina apply. LLCs are created and governed by state law. Many of the default provisions for LLCs may be overwritten by creating one.

5. More Control

An Operating Agreement allows you to control the daily operations of the business, how the business grows, future memberships, members’ voting rights and responsibilities, and distributions from the LLC. Without a detailed agreement, you remain in control of your company even if you choose to add members in the future. 

Contact a South Carolina Business Attorney to Discuss Limited Liability Companies 

Our South Carolina business attorney can help you determine if an LLC is right for your company. We discuss the pros and cons of an LLC. If you want to form an LLC, we can handle all aspects of the business formation, including drafting an LLC Operating Agreement. Schedule a consult today.

Group of employees looking at business entities

Pros and Cons of the Most Common Business Entities

A crucial step that entrepreneurs must take when starting a business is choosing a business entity for their company. Business entities have advantages and disadvantages. The type of business entity you choose depends on your desires, needs, and plans. A South Carolina business attorney can help you decide which entity provides the benefits you need for your business. 

Comparing Pros and Cons of Business Entities

The four most common business entities used are sole proprietorships, partnerships, corporations, and limited liability companies.

Pros and Cons of a Sole Proprietorship

Many small business owners are sole proprietorships. A sole proprietor is someone who owns a full interest in an unincorporated business. Sole proprietors can begin working for themselves without filing any official forms or registering their business with the state. It is the easiest business entity to form, operate, and maintain. The owner is in full control over the business and reports the business income and loss on his or her personal income tax return. 

However, there are some negatives to this type of business entity. A sole proprietor is personally liable for all debts and obligations of the business. Therefore, the owner’s personal assets can be seized for company debts. Also, when the owner dies, the business ceases operation. The assets are subject to the owner’s probate estate. 

Pros and Cons of a Partnership

A partnership consists of two or more individuals who wish to conduct business together. The partnership agreement governs the relationship between the partners. There are several different types of partnerships: general partnership, limited partnership, limited liability partnership, and limited liability limited partnership.  

The main difference between the various partnership structures is the personal liability of each partner. In a general partnership, all partners share personal liability for the partnership debts and obligations. They are also equally liable for any actions or decisions made by the other general partners. With a limited partnership, some partners have limited liability, but they are not involved in the management of the partnership. Limited liability partnerships are usually used for professional service businesses, such as law firms, accounting firms, and physician offices. Typically, the personal assets of each partner in a limited liability partnership cannot be used to satisfy partnership debts.

Partnerships are typically easy to create and maintain. However, partnerships involving limited liability may be more difficult and expensive to create compared to a general partnership. Also, partnership agreements must be carefully drafted to handle the death or exit of a partnership or the dissolution of the partnership. 

Partnerships are not subject to double taxation. The partners share in the income generated by the partnership. The income is reported on the partners’ personal income tax returns. 

Pros and Cons of a Corporation

There are also several different types of corporations: C-Corporations, S-Corporations, Professional Corporations, and Nonprofit Corporations. Each type of corporation may have specific pros and cons associated with that type of business entity.

In general, the main benefit of incorporating is to avoid personal liability for company debts. The shareholders of a corporation are not personally liable for the debts or obligations of the company. Their personal assets are not at risk. 

However, corporations are more costly to form and maintain. In addition to filing Articles of Incorporation with the state, the corporation must file annual reports. It must also have bylaws that govern the company’s operations. A board of directors oversees the company. The board answers to the shareholders who appoint the board members. The board appoints officers who are responsible for the day-to-day operations of the company. 

Corporations are subject to double taxation. The income from the business is reported and taxed on a corporate tax return. The dividends paid to shareholders are considered income and must be reported on the shareholders’ personal income tax returns. 

Pros and Cons of a Limited Liability Company

A limited liability company (LLC) offers many of the benefits of a corporation and partnership without some of the disadvantages. An LLC’s members (owners) have limited personal liability for company debts and obligations. Profits pass through the LLC and are reported on the members’ personal income taxes, so the company profits are not subject to double taxation. 

However, an LLC must register with the state and have an operating agreement that governs how the company functions. In some cases, it can be difficult for members to sell their interest in the company or leave the company. Operating and maintaining the LLC can be more expensive than a sole proprietorship or partnership. 

Contact a South Carolina Business Attorney for Help

Choosing a business entity for your company can be confusing. The above pros and cons of business entities are a brief introduction to the various entities you might consider for your company. Contact Willcox, Buyck & Williams, PA for more information today. Our South Carolina business attorneys can conduct a full evaluation of your business venture and provide a detailed legal analysis of the pros and cons of each business entity in relation to your unique situation. 

Person looking at key insurance policy.

Should Our Company Have Key Person Insurance?

When you operate a business, there are many types of insurance that you need. Some insurance policies are required by law, such as automobile liability insurance or workers’ compensation insurance. Other types of insurance are a wise investment to protect your business, such as liability insurance and property insurance. Our South Carolina business attorneys can help you review your insurance options, including whether you may need key person insurance coverage for your company. 

What Is Key Person Insurance?

Most companies have at least one or more key employees that would be difficult to replace, especially if they died suddenly. It would take time to find suitable replacements, train the replacements, and return to normal work routines. The process can be costly, especially if the company loses clients and customers during the transition. 

Key person insurance helps cover the cost of replacing key employees after a sudden death. It is a life insurance policy for top employees in a company. The proceeds of a key person insurance policy can be used to pay for the recruitment, training, and development of a new employee. The proceeds can also be used to help reimburse the company for financial losses that might occur because of the death of a key employee. 

How Do I Know if I Need Key Personal Insurance Coverage? 

Any company can benefit from key person insurance coverage. The loss of a key employee is never easy for a company. Large companies often cross-train to help reduce the impact of losing an employee. However, a small business that depends heavily on one or two key employees could be devastated if one of those employees suddenly dies. The death of a key person could threaten the company’s financial stability. 

Some circumstances that might indicate the need for key person insurance include:

  • Partners who want to ensure they have sufficient funds to purchase the other partner’s interest in the case of the partner’s untimely death.
  • An employee, such as a salesperson, whose sudden death could lead to an immediate decrease in company revenue. 
  • There are no other individuals who could step into the role of the key employee.
  • Sole proprietors who want to ensure sufficient funds to pay debts of the company or continue the company until employees can find other work.
  • You have a specialized employee that is crucial to the business, and it will take time to locate another employee with the same skills and expertise. 
  • Your company relies on one person to generate most of the company’s revenue.

There could be many other reasons why your company could need key person insurance coverage.

Purchasing Key Person Insurance Coverage

You can purchase key person insurance policies from a variety of companies. The cost of coverage, types of coverage, and policy limits vary depending on a variety of factors. It is advisable to speak with several insurance companies to compare costs and coverages. As with any insurance policy, it is important to read the entire policy to ensure you understand the exclusions and limitations before purchasing the policy.

Contact a South Carolina Business Attorney for Help With Your Business 

A South Carolina business attorney can help you with a variety of issues related to your business, including business succession plans, contracts, litigation, taxation, and compliance. Do not wait until you need legal advice. Get legal advice now to avoid problems and issues that could be costly and time-consuming. Contact Willcox, Buyck & Williams, PA for more information today.

Willcox, Buyck & Williams, PA discusses who is responsible for debts and other obligations when a business folds.

When a Business Folds, Who Is Responsible for Its Debts and Other Obligations?

There are many reasons why a business may close its doors. In some cases, a business closes even though it owes debts to several creditors. If the company is no longer in business, who pays those debts? The answer to that question usually depends on the type of business entity used to form the company. A South Carolina business law attorney can assess the matter to determine if one or more parties might be personally liable for the company debt.

Personal Liability for Business Debts Based on the Business Entity

The type of entity used to form the company has a significant impact on whether owners, members, or partners might have personal liability for business debts or obligations. 

For example, a sole proprietor is personally liable for all business debts owed by the company even when the company closes. On the other hand, shareholders in a corporation have no personal liability for company debts if the business closes. 

Owners (members) of an LLC could have some personal liability for business debts. South Carolina laws governing LLCs state that members and managers are not personally liable for company debts and obligations incurred by the company in the normal course of business. However, if the member or manager commits a wrongful act in the course of conducting the LLC business, the member or manager could be held personally liable for debts or damages.

Partners can also be personally liable for business debts in some cases. In a general partnership, all partners are equally liable for partnership debts. However, in a limited partnership, limited partners do not participate in operating the business. Like shareholders, they are not personally liable for business debts. In limited liability partnerships, all partners are protected from personal liability for business debts.

Exceptions to Rules Regarding Personal Liability for Business Debts

Except for shareholders who play no rule in the operation of the business, owners who may not ordinarily be liable for business debts could be personally liable in some cases.

For instance, if an LLC member or a limited partner sign a personal guarantee for a debt, that person is liable for the debt if the company does not pay the debt for any reason. Signing a contract in your personal name also results in personal liability for business debt. All contracts for the company should be signed in the company name. Likewise, using personal loans or personal credit cards for business expenses means that you are personally liable for the debt.

In some cases, courts allow creditors to “pierce the corporate veil” to hold owners, members, or partners personally liable for business debts. These cases generally involve intentional misrepresentation, fraud, or failing to maintain the business entity through proper recordkeeping, corporate formalities, and state requirements. 

Discuss Your Concerns with a South Carolina Corporate Law Attorney

If you are concerned whether you might be personally liable for a business debt, contact a South Carolina corporate law attorney. An attorney can advise you of your legal obligations. Before beginning a business, it is wise to consult with an attorney to determine which business structure offers the benefits you desire while protecting you from personal liability for business debts. Contact Willcox, Buyck & Williams, PA for more information today.

Willcox, Buyck & Williams, PA discusses what you need to know about UCC filings.

Understanding UCC Filings

UCC (Uniform Commercial Code) filings are financing statements filed by mortgage companies, banks, creditors, and other lending institutions against secured collateral. The purpose of a UCC filing is to place other creditors on notice that a creditor has a secured lien against certain collateral that a debtor may be attempting to pledge as collateral for a loan. While creditors, lenders, and other lending institutions may file a UCC statement without the assistance of an attorney, many creditors seek legal advice from a South Carolina business lawyer to ensure that the UCC filing is correct and enforceable. 

Five Things You Might Not Know About UCC Filings In South Carolina

1. The South Carolina Secretary of State’s Office Handles UCC Filings

UCC statements are filed with the South Carolina Secretary of State’s Office. The filings may be submitted online and searches of UCC filings may be conducted via the internet through the Secretary of State’s Office. Filers may also submit UCC statements for filing through the mail or in person at the Secretary of State’s Office in Columbia, SC.

2. Some UCC Statements are Filed with County Offices

In addition to filing a UCC statement with the Secretary of State’s Office, UCC statements that cover real estate fixtures, timber, mineral rights, and tax liens should be filed in the county of residence for the debtor (the person who owes the money) or the county in which the property is located. 

3. UCC Liens Can Be Filed Against Businesses and Individuals

UCC statements can be filed against an individual or legal entity. An individual or business may pledge a variety of assets as collateral for a debt, including but not limited to:

  • Inventory
  • Accounts Receivable
  • Office Equipment
  • Vehicles
  • Real Estate Fixtures
  • Letters of Credit
  • Commercial Equipment 
  • Investment Securities
  • Commercial Instruments, such as promissory notes or drafts
  • Other Goods Used or Owned by a Business 

4. UCC Statements Do Not Prevent Additional Loans Secured by the Same Collateral

A UCC statement does not prevent another lender from loaning money secured by the same collateral listed on a filed UCC statement. However, the subsequent lender is “inline” behind the creditor who filed the first UCC lien. If the debtor defaults on the loan terms, the creditor who filed the first UCC statement has priority to seize the collateral and sell it to satisfy the debt. UCC statements place lenders on notice that they are getting “inline” behind one or more other lenders who have liens on the same collateral.

5. UCC Blanket Liens Cover all Business Assets

Many UCC statements are filed for specific collateral. However, a business may pledge all of its assets as collateral for a loan under a blanket UCC filing. A blanket UCC filing could make it more difficult for a business to obtain additional funding until the UCC statement is satisfied and canceled of record. Lenders typically prefer blanket UCC liens, but it is not always a wise choice for a business. 

Contact Our South Carolina Business Attorney for More Information About UCC Filings

Disputes and issues related to UCC filings can be time-consuming and costly. Before filing a UCC or signing a UCC statement for a lender, it can be beneficial to consult a South Carolina business attorney to discuss your legal rights and obligations regarding a UCC lien.

Willcox, Buyck & Williams, PA discusses five tips to help sell a privately-owned business.

Five Tips for Selling a Privately-Owned Business

You have built your company over the years into a thriving, successful business. However, you are ready to sell your privately-owned business, but you want to get top dollar for the company. A South Carolina business attorney can help you take the necessary steps to ensure that you receive the best value for your business. Below are five tips that can help you as you begin the process of selling your company. 

Five Steps to Sell your Private Owned Business

1. Begin Preparing to Sell Your Business as Early as Possible

If you anticipate that you might want to sell your company in the next few years, begin the process of preparing for a sale right now. You need accurate books and records, a strong customer base, and the correct business structure to successfully sell a privately-owned business. Making improvements and changes now to your record-keeping procedures, structure, and management style can help you prepare for a smooth sale and transition.

2. Obtain a Business Valuation

It can be difficult to be objective when valuing a business that you built with sweat equity. Obtaining a business valuation from an expert is the best way to know exactly how much your company is worth. Having a professional business valuation can also assist in obtaining the price you desire for your company because potential buyers have an expert opinion to rely upon when making a purchase offer.

3. Prepare Current Financial Documents for Sale

You need several financial documents that are current and up-to-date to present to potential buyers, such as company tax returns, profit and loss statements, balance sheets, and client information. Many buyers prefer to see several years of tax returns and financial statements to gauge the success of the business. Have these documents prepared and ready for prospective buyers to review.

4. Deal with Parties Who Are Pre-Qualified

A pre-qualified buyer is an individual or company who has qualified for financing with a lender prior to making an offer to purchase. Working with pre-qualified buyers reduces the risk that a deal goes through because of a lack of financing. It can be frustrating, time-consuming, and costly to have a deal fall through at the last minute because a buyer could not qualify for financing to purchase your business. 

5. Retain an Experienced South Carolina Business Attorney to Assist with the Sale of Your Business

There are many factors that must be considered when selling a privately-owned business. In addition to the legal documents required to transfer the business, you need an exit strategy that maximizes your profit while reducing your tax liability and general liability after you sell your company. 

An experienced business attorney can assist you with drafting the required legal documents to sell your company, take steps to limit your personal liability, and negotiate a fair price for your company with potential buyers. An attorney can also help you locate a pre-qualified buyer who is serious about purchasing your company.

Consulting a South Carolina business attorney who understands that various legal requirements and laws governing business transactions can reduce the risk of making an error or mistake that could result in expensive legal problems in the future. Contact Willcox, Buyck & Williams, PA to

Wilcox, Buyck & Williams, PA discusses five tips to help protect your trade secrets from your current employees.

Five Tips to Protect Your Trade Secrets from Exiting Employees

Every business has trade secrets. Your business has sensitive information that requires protection to maintain privacy and confidentiality. Your secrets or proprietary information has economic value for your business. Failing to work with a South Carolina business lawyer to take steps to protect trade secrets from being disclosed or used by exiting employees could result in substantial economic losses and other problems for your company.

What is a Trade Secret?

The first step in protecting a trade secret is to recognize what information constitutes a trade secret. A trade secret is information that is not known outside of your business. Some of them become public knowledge when a company files for copyright, patent, or trademark protection. However, there could be several reasons why you want to keep certain information held within your company. Also, you want to protect information that you may make public at a later time under a trademark, patent, or copyright.

Examples of trade secrets include:

  • Programs and apps
  • Processes
  • Formulas
  • Methods
  • Patterns
  • Devices

Any information you use to conduct business that is privately known within your company and has value can be considered a trade secret.

These are used within your company for a variety of reasons. Therefore, some employees will need to know about the information to perform their jobs. However, these employees may eventually leave. How can you ensure their privacy if an employee leaves the company?

Five steps a business can take to protect trade secrets are:

  • Always identify trade secrets within your company. Mark the information as confidential and limit access to the information to an as-needed basis. Various levels of security should be used to control access to them, such as securing hard copies in locked cabinets and rooms, requiring special passwords and badges to access areas where trade secrets are located, and password protect and encrypt files containing a trade secret. 
  • Know and understand the various laws that govern trade secrets, such as the Uniform Trade Secrets Act, Defend Trade Secrets Act of 2016, South Carolina Uniform Trade Secrets Act, and Economic Espionage Act of 1996.
  • Assess risks and vulnerabilities within your business and outside of your business. Develop a plan to address risks and vulnerabilities, such as using higher-level security measures, including biometric locks, encryption, and strong passwords. Train employees on procedures and policies related to trade secrets and quickly undertake disciplinary action of employees who violate the procedures and policies to protect them.
  • Require employees to sign nondisclosure agreements (NDAs) and non-compete agreements as part of their employment. Include these statements in your employee handbook. The agreements may not keep an employee from using or stealing trade secrets, but the agreements are legally binding contracts that you can use as the basis of a civil action if the employee breaches the terms of the agreement. The remedies for a breach discourage many employees from violating the terms by stealing or using them.
  • Collect all confidential information from an employee when the employee quits or the employment relationship is terminated. Do not forget to collect hard copies of documents, keys, access badges, and electronic equipment in the employee’s possession. Also, immediately revoke the employee’s access to systems and change all logins and passwords confidential information. 

Contact a South Carolina Business Attorney for More Information

Well-drafted NDAs and other employment agreements offer a level of protection against theft of trade secrets. A South Carolina business attorney can help you develop confidentiality agreements and other contracts that protect your company’s secrets and other valuable information. Schedule a consult with a member of our team at Willcox, Buyck & Williams, P.A. to learn more today.

Willcox, Buyck & Williams, PA discusses several considerations for businesses adopting biometric authentication strategies.

Businesses Adopting Biometric Authentication Strategies

Security is a top concern for all business owners. Issues related to protecting trade secrets, confidential information, company information, and customer data continue to be problematic, especially as hackers learn new ways to defeat security measures. In addition to utilizing enhanced security techniques, such as two-factor authentication (2FA), some companies are exploring biometric authentication technology to enhance security. 

However, companies contemplating biometric authentication may want to discuss important considerations with their South Carolina business compliance lawyer before investing significant time and resources into deploying the security feature.

What is Biometric Authentication?

Biometric technology is becoming a popular security tool for many companies. The technology is growing and evolving quickly. Larger companies and the government have used it for some time, but it is now becoming more popular for use in smaller companies and companies who maintain customer login accounts. Biometric security features can use fingerprints, handprints, and face scans to verify identity. Some companies are developing AI technology that can recognize a user’s keystrokes and habits to provide additional security.

Considerations Before Deploying a Biometric Security System

Several things that you should consider before purchasing and deploying a biometric system include:

  • Do you want to add biometrics to your current security system? If so, you need to ensure that all levels of your security system work together efficiently and effectively. You also need to ensure that all software platforms are compatible.
  • Unimodal biometric systems versus multimodal biometric systems. A unimodal biometric system has only one level of security (it captures a single biometric trait). Multimodal biometric systems use multiple independent biometric traits, such as a fingerprint and a face scan. If you do not intend to use additional security measures, you may want to use a multimodal system to increase security.
  • What type of biometric hardware will you need to implement a biometric security system? You need to factor the cost of hardware and the maintenance of the hardware into your cost analysis before switching to biometrics for security.
  • What privacy concerns do you need to address? Capturing and storing an employee’s or customer’s biometric information could result in privacy and liability issues for the company. How can you protect a user’s biometrics on your system?
  • How will you educate your employees and customers about the biometric security system? Some individuals may not be willing to have their biometrics captured and stored for identity verification. You may need to provide detailed information about the biometrics system and how you intend to protect the data once you have it in your system.
  • What is the cost of upgrading? Biometric technology continues to evolve. What will be the cost of updating your system as new features and upgrades are available? As with other programs, you need to have the most current version and update to provide the best protection from hackers and thieves.
  • How difficult is the biometric system to use? If the system is difficult to use, consumers may become frustrated and choose another company.

Contact a South Carolina Business Attorney for More Information

The above issues are just some of the considerations a company needs to address before implementing a biometric security feature. A South Carolina business attorney can help you evaluate the legal issues related to biometrics. Failing to consider the various legal issues related to using biometrics could result in costly legal problems. Schedule a consult with a member of our team at Willcox, Buyck & Williams, P.A. to learn more today.

Willcox, Buyck & Williams, PA answers the 7 most common start-up questions.

7 Most Common Start-Up Questions (and Answers)

Do you have an idea for a business? If so, you may be on the verge of beginning a new start-up. If this is your first time creating a business, you probably have several questions about operating a start-up. A South Carolina business attorney can answer your questions about start-ups and guide you through the various aspects of starting a business.

7 Start-Up Questions to Ask an Attorney

1. How do I choose a business name for my start-up?

One of the most important choices a business owner makes is choosing the name of the company. Give the choice of a business name careful consideration. Your company’s name plays a significant role in your branding. A business attorney can confirm that the business name is available and reserve the name for you.

However, you may want to research the company name on the internet to ensure that it is not being used unofficially. You may also want to ensure that no part of the business name is connected to or associated with any negative phrases, products, or slang.

2. What is the best business structure for my start-up?

A sole proprietorship is the simplest and least expensive business entity, but it does not protect against personal liability for company debts and obligations. A corporation provides the strongest level of personal liability protection, but it is more costly and time-consuming to form and operate a corporation. LLCs and partnerships fall somewhere in the middle.

The structure you choose for your company impacts your taxes, personal liability, ability to obtain capital and funding, and day-to-day operations. A business law attorney can explain in detail the pros and cons of each type of business entity. Based on your needs and goals, your attorney can help you choose a structure that is best for your company and personal interests.

3. What is my level of personal liability for company debts and obligations?

The business structure and how you operate the company dictate your personal liability for company debts. You can still be responsible for corporate debts if you cosign the debt or personally guarantee the debt. Also, creditors may prevail in pursuing personal liability claims in some situations. Depending on your situation, you may want to work with an attorney to take additional steps to protect your personal assets.

4. How are taxes paid by the company and by the owners or investors?

The business entity you choose typically dictates the payment of taxes. Some business entities, such as partnerships and sole proprietorships, are “pass-through” entities for tax purposes. The business profits and losses are reported on the individual’s personal tax returns. Corporations pay corporate taxes. Shareholders and investors pay personal taxes on the net profits or distributions they receive from the company. An LLC can choose to be taxed as a corporation or a partnership.

5. How can I protect intellectual property and trade secrets?

A start-up should take immediate steps to protect trade secrets and intellectual property. An attorney can help the business file for patents and trademarks. The attorney can also explain how to use copyright laws, nondisclosure agreements, and confidentiality agreements to protect intellectual property and trade secrets.

6. What contracts do I need for a start-up?

Your start-up may need several different contacts to protect the company’s interests. The types of contacts you need vary based on your specific needs and business. Most companies need basic contracts related to employees, confidentiality, leases, sales, and privacy policies. A business law attorney can draft the contracts your start-up needs.

7. What type of insurance do I need for my start-up?

There are several different types of insurance your company may need based on the services or products you provide. Most companies need general liability insurance. A business attorney can assess your risks and company activities to determine what other types of insurance you may need. Common insurance types include unemployment insurance, automobile insurance, commercial property insurance, business income insurance, business interruption insurance, data breach insurance, and commercial umbrella insurance.

Contact a South Carolina Business Attorney for Help

You may have many more questions about your start-up that a South Carolina business attorney can answer. It is always a wise idea to consult with a business law attorney when beginning a start-up. It is also a good idea to keep an attorney on retainer to help with future legal matters and issues. Contact Willcox, Buyck & Williams, PA today.