Entering into the maritime or transportation industries can be lucrative. But before you launch your business or modifying it to suit your needs, you’ll have to a make a lot of business decisions that’ll have wide-ranging implications for your operations for a long time to come. Securing a commercial space, hiring talent, and developing a marketing strategy can all come into play, but before you even get to that point, you’ll have to settle on a business structure to utilize. This structure can dictate how much power you have in making business decisions, how income is taxed and what regulations you’ll have to abide by.
Although there are several business types you can turn to, one of the most common is the corporation. While there are several advantages to the corporate structure, there are mistakes that can be made along the way when creating a corporation. If you’re unaware of these potential errors, then you could set yourself up for otherwise avoidable issues. You don’t want that to happen, as these mistakes can be costly and devastating to your business.
Mistakes to avoid when creating a corporation
There are several errors that can be made along the way when starting up a corporation. Here are some that you’ll want to be sure to avoid:
- Assuming you’re not big enough to incorporate: A lot of people think that you have to be a big business in order to incorporate, so they write off their ability to utilize this business structure. But the truth is that any size business can choose to incorporate, so don’t make the mistake of simply overlooking this business structure as an option.
- Overlooking or ignoring regulatory compliance requirements: Before settling on incorporation as your best business option, you need to understand the corresponding regulations that’ll attach to you once you go that route. There are strict guidelines that have to be adhered to when you incorporate, otherwise you could face hefty fines and penalties that could devastate the financial well-being of your business.
- Unclearly defining corporate roles: As you embark on your business endeavor, you’ll want to ensure that all key players have clearly identified roles in the business structure. If they don’t, then there can later be confusion and disputes that lead to costly litigation and muddled corporate direction. This can stall your business’s growth and even threaten it with dissolution.
- Improperly allocating shares: When shareholders come into play, you need to ensure that shares are allocated appropriately. If you don’t, then there could be wide-ranging and long-lasting implications that prove negative for your business. It might be a good idea to speak to an expert about the best way to issue shares, that way you head off any issues that could arise early on in your business’s creation, such as giving too much power to an individual shareholder.
- Rushing the process: There’s a lot that goes into the business creation process, especially when you’re pursuing incorporation. Make sure you give yourself enough time to thoroughly think through the issues. If you don’t, then you could make a mistake that proves costly to your business.
Do you have lingering questions about incorporating your business?
If so, then now is the time to find answers to your questions. Don’t wait too long, or you could miss an opportunity to help your business expand and secure a larger market share. So, if you’re ready to figure out your best path forward, then now is the time to seek out any guidance that you may need.
