The question of how to organize your business may seem banal and bureaucratic, something that does not have a real impact on the day-to-day operation of your company. However, without realizing it, your business organization may be making a major impact on whether your company succeeds or fails. Here are five potential benefits you can get from reorganizing your business:
- It can reduce your tax burden
- No one likes having to pay taxes, and certainly no one likes the idea of paying more taxes than they need to. And yet, many business owners organize their businesses in a way that leaves them paying more taxes than would if they organized differently. By changing your business structure, you could reduce that tax burden, making your business more profitable as a result.
- It can help protect you from liability
- Every business owner operates with the risk that their business may wind up dragged into court for one reason or another. Depending on what business structure you have, though, you could become personally liable for any legal or financial liability your business incurs. With the right business organization, you can protect yourself from that liability, ensuring your business problems do not come back to haunt you personally.
- It can help your business run more efficiently
- Many businesses, especially smaller ones, are started without any real structure to how it operates. While this may work for some small businesses, any company that wants to grow will need to sort out its structure to ensure it can handle a larger volume of customers. Reorganizing your business can help you sort out many of the organizational issues your business has been dealing with, helping it to run more efficiently as a result.
- It can protect your ownership rights
- Technically, you do not need any kind of formal agreement to start a business with someone else, but that does not mean it is a good idea. Often, business partners who do not have a formal partnership agreement or other organizing document can find themselves arguing over their rights and responsibilities at the company. Reorganizing your business can give you a chance to formalize your ownership rights, giving you added protection if you ever get in a fight with your business partners.
- It can make it easier to change ownership
- It is fairly common for a business to change ownership after a time, with people entering or leaving the company for various reasons. If you do not have a business structure that accommodates it, though, the process of adding or removing a co-owner can become complicated and messy. Reorganizing your business can help streamline this process, giving you more flexibility to handle your company as you see fit.
The business law attorneys at Blodnick, Fazio & Clark are skilled and knowledgeable in the areas of business law and commercial transactions. With offices conveniently located in Garden City, Nassau County, and Babylon, Suffolk County, the firm provides high-quality legal care at reasonable prices. If you require legal assistance concerning business startups, formation, corporate acquisitions and mergers, corporate restructuring, or another business matter, call (516) 280-7105 or fill out our contact form for a free consultation.