| The type of business structure you organize | | | | partners responsibilities (silent, working, |
| for your new enterprise is greatly determined | | | | sales, marketing, production, etc.), and an |
| by your personality, realities, needs and | | | | agreed split of income, profits and harvest, |
| experience. Millions of people in the United | | | | as well as liabilities and losses.I like, and |
| States never enter into any type of formal | | | | often recommend, a partnership for young |
| business structure. This includes the bulk of | | | | entrepreneurs with limited, narrow |
| the black or underground economy.It is | | | | experience. Operations experience often does |
| estimated that the underground economy | | | | not translate to sales and marketing for |
| consists of about 10% of all commercial | | | | instance. The only imperative is that there |
| activity in the United States. This includes | | | | are no surprises after the enterprise |
| legal and illegal activities. A kid cutting | | | | succeeds, or fails. This when a cloudy |
| your grass for $20 is technically working | | | | division of liabilities or profits often |
| black. The handyman that repairs your patio | | | | becomes problematic.Limited Liability |
| for cash might be working black. Drug dealers | | | | Corporation (LLC)Again, there are "do it |
| are definitely kingpins of the underground | | | | yourself" methods of creating LLC's. Use an |
| economy.Entrepreneurs should not want to work | | | | attorney. I am no friend or fan of the legal |
| black, but should seek to be totally | | | | profession. I am not a lawyer, either. I just |
| transparent for many reasons. The reason a | | | | know from experience that this is difficult: |
| person typically seeks to become an | | | | and often a contentious area of law that |
| entrepreneur is to maximize the opportunity | | | | requires expertise.An LLC limits the owner's |
| our capitalist system offers each person | | | | exposure to some losses. The LLC also enables |
| willing to try. This means playing by the | | | | the owner to treat income beneficially for |
| rules, competing and pursuing success | | | | tax purposes. Professional legal and |
| utilizing every available legal tool. The | | | | accounting assistance is really important in |
| opportunity to sell a successful | | | | establishing the LLC in a proper legal |
| entrepreneurial business is almost zero | | | | format.CorporationThe Corporation offers the |
| without complete books, records and tax | | | | most comprehensive protection for the owners. |
| returns, typically details that underground | | | | Losses accrue to the Corporation, in most |
| business works hard to avoid.I recommend any | | | | cases. The Corporation assumes the role of a |
| new entrepreneur seek consultation with an | | | | person, even though abstract. A Corporation |
| attorney familiar with the laws and | | | | requires the filing of Articles of |
| regulations of the state, county, city or | | | | Incorporation in a state. Consult an attorney |
| township of your residence. Even if you are | | | | for advice on which state to file this |
| planning to run your enterprise as a sole | | | | document. Nevada offers secrecy. Delaware is |
| proprietorship, there are local zoning laws, | | | | most popular for large corporations. Each |
| restrictions on business activity, public | | | | state has different fees and requirements. |
| announcement requirements, DBA (Doing | | | | Get good help!The Incorporation requires a |
| Business As), fictitious name ordinances, | | | | fair amount of housekeeping. This includes |
| etc. Do not try to avoid the pesky forms and | | | | appointing a board of directors, keeping |
| filings required in most localities. If | | | | meeting minutes, issuance of stock, etc. Many |
| compliance is a hurdle for you, then success | | | | startups convert to corporate status after |
| prospects for you as an entrepreneur are | | | | achieving some amount of success.There are |
| probably slim.Your investment in the attorney | | | | other intricate options, trusts and arcane |
| consultation will pay for itself. You can go | | | | structures available. However, for 99.9% of |
| online, or visit the business section of the | | | | all entrepreneurs the four discussed here |
| local bookstore and find just enough | | | | offer the best vehicles for properly |
| information to get yourself in trouble in | | | | structuring a new business. Approach each |
| these areas. Occasionally, I meet an | | | | with the goal of maximizing your income and |
| entrepreneur that did not consult | | | | minimizing your time commitment to |
| professionals, and has everything in order. | | | | housekeeping the entity you choose. Remember: |
| This is very rare. More often, I meet | | | | in order to be successful as an entrepreneur |
| shortsighted dreamers trying to cut a corner | | | | will require every scintilla of your thought, |
| and save a few dollars. Professional help | | | | work and creativity to be concentrated on |
| will save you time, money and mistakes.Here | | | | your project.Geoff Ficke has been a serial |
| are the most common business structures that | | | | entrepreneur for almost 50 years. As a small |
| entrepreneurs have access to when formalizing | | | | boy, earning his spending money doing odd |
| their new venture.Sole ProprietorshipThis is | | | | jobs in the neighborhood, he learned the |
| the most commonly utilized structure for new, | | | | value of selling himself, offering service |
| small, startup business ventures. | | | | and value for money.After putting himself |
| Essentially, the proprietor, you, the | | | | through the University of Kentucky (B.A. |
| entrepreneur, announces that you are working | | | | Broadcast Journalism, 1969) and serving in |
| alone. The sole proprietor accounts for all | | | | the United States Marine Corp, Mr. Ficke |
| income from sales as personal income and is | | | | commenced a career in the cosmetic industry. |
| responsible for all debts incurred by the | | | | After rising to National Sales Manager for |
| enterprise. Personal and business funds are | | | | Vidal Sassoon Hair Care at age 28, he then |
| often commingled in this structure and need | | | | launched a number of ventures, including |
| to be identifiable for tax purposes. There is | | | | Rubigo Cosmetics, Parfums Pierre Wulff Paris, |
| no formal corporate entity, but you must | | | | Le Bain Couture and Fashion Fragrance.Mr. |
| adhere to all local laws and statutes. A | | | | Ficke and his consulting firm, Duquesa |
| Federal Identification Number is not needed | | | | Marketing, Inc. ( has assisted businesses |
| (use Social Security Number) when filing | | | | large and small, domestic and international, |
| taxes.PartnershipWhen two or more people | | | | entrepreneurs, inventors and students in new |
| decide to enter a partnership, they basically | | | | product development, capital formation, |
| agree to enter a form of marriage. We all | | | | licensing, marketing, sales and business |
| know that marriages can get messy. Partners | | | | plans and successful implementation of his |
| must minimize any possibility for a messy | | | | customized strategies. He is a Senior Fellow |
| divorce by creating a partnership agreement | | | | at the Page Center for Entrepreneurial |
| that details what each partner brings to the | | | | Studies, Business School, Miami University, |
| opportunity (investment, sweat equity, | | | | Oxford, Ohio. |
| intellectual property, etc.). Also, the | | | | |