Starting a business requires making all kinds of decisions, and one of the most important is how you’re going to operate and do business. You have to ask aaallllll kinds of questions about concepts that are pretty foreign to folks new to the game: Will you go start making money and growing your business without incorporating at all? Will you file a DBA/assumed business name/fictitious name and stay in that lane until you make more money? What’s difference between an LLC and a corporation and why does it matter? I recently talked with business law expert Carliss Chatman about all of this and she offered some amazing advice that I’m excited to share here.
Carliss holds a number of titles, including attorney, author, and business law professor at Washington and Lee University School of Law, where she teaches classes including Contracts; Sales and Leases; Agency and Unincorporated Entities, Corporations, and Business Associations. She has more than a decade of experience representing small and start-up businesses in the United States and the Kingdom of Saudi Arabia. If you are wondering about whether and how to incorporate your business, Carliss is definitely the expert to ask.
Carliss and I had an incredibly wide-ranging discussion about how new entrepreneurs can set up their ventures. We talk about how to decide between an LLC and a corporation, when a limited partnership makes sense, and why you should always have a separate bank account for your business. We also spend a few minutes at the end talking about her viral tweet, which to date has nearly 600,000 likes and more than 200,000 retweets, and how she was actually prepared to make that unanticipated moment work for her brand and professional projects.
One of my favorite a-ha moments happened early in the discussion when I asked Carliss when entrepreneurs should think about incorporating their business, and her reply was, “you should not do one thing without forming some entity that gives you liability protection.” Basically, forming a separate entity should come first, before you do anything. She explains why she believes this, and more, throughout our conversation.
You’ll also learn:
- Why the LLC isn’t always the best way to go.
- How to decide between a corporation and an LLC.
- Why your business may not need to own all of your intellectual property.
- How to make decisions today based on the future plans you have for your business.
- Why and how the prospect of VC funding should impact how you form your business.
- When to hire a lawyer to help form a business entity and how to choose the right lawyer.
If you are wondering how to move forward with forming the right business structure, THIS. IS. THE. DISCUSSION. FOR. YOU. Check out the video below for all of the amazing-ness that is Carliss Chatman and her expertise.
I’d love to hear your thoughts about this discussion. What’s something you learned that you didn’t know before you listened to it? Are there questions that you still have? Let us know in the comments below.