As soon as you start selling something, be it anything from home-made jewelry to data architecture consultation services, you start a business. Some people view the word "business" as implying the presence of a storefront and employees, but that's not always the case. A business might be a sole proprietorship, in which all of the work is left up to one person, a partnership or LLC, where several people work together and share input into business decisions and work, or a corporation. One of the biggest differences between a sole proprietorship and a partnership, and an LLC and a corporation is the change in liability.

So what is liability? Having liability means that people (customers, suppliers, employees, random people walking by your store who slip, or anyone else that is adversely affected by your business) are able to personally sue you, the business owner. By having "liability," you assume the risk of the business. In practical terms, for most people, this can mean that a freak accident taking place can mean the loss of significant financial assets (read: someone slips on an old banana peel in your company's showroom and you lose your house). LLCs and Corporations relieve that stress, as each holds what's called "limited liability." In layman's terms, that means that the company and the owner are separate in the eyes of the law, so when someone sues the company, the check doesn't come out of the owner's pocket. Another difference between types of businesses comes around tax time.

A number of factors can determine the best approach to starting a business from scratch or reviving an old idea. No matter the size of your business, be it just you or a team you've carefully crafted to fit your needs, it is important to work out some of the technical details of how you will establish yourselves legally. We will want to consider your ownership plans, assets, business model, and expected profits to determine the best approach to letting you expand without having to worry about the little things.

When you buy a car, you accept the fact that it will need oil changes and other minor maintenance to keep it running for years and years. You can ignore warning lights and dealer suggestions all you want, but things will wear down and it just won't last as long. A business is similar. Mindlessly filling out tax and registration forms each year will only get you so far. Businesses naturally change with time, and it is important to regularly review your legal practices and keep up to date with government expectations to allow for expansion and keep taxes manageable.