“Making it Official”

Posted in: Uncategorized by Josh Andrews on July 13, 2009

Many entrepreneurs make money with their ideas before they ever “make it official” and form a company. If you ask ten different people when you should “make it official”, you will likely receive as many answers. Here is my take on when it is time to make “make it official”.

If you have an idea that makes money and requires no overhead and you will never have customers or clients coming on your property or who might be angry about something you (or someone who works with or for you) sell or do, you are probably okay to operate as a sole proprietor (or a partnership if there are two or more of you).

If, however, you will have property, employees, customers, vendors, independent contractors, or any other relationship outside of yourself to make your business venture succeed, you might want to consider “making it official” and forming a company separate from yourself.

All the available legal business entities do one thing for the owner: protect from liability. If you decide to “make it official” and form a company for your business venture you will be protected from claims by employees, independent contractors, vendors, actions taken by those in your employ, injuries incurred while on your property and contract liabilities. Essentially, when you create a company separate and apart from yourself, you have created a way to protect and limit your investment in your business.

It is important that all entrepreneurs wisely consider creating a shield to separate their personal assets from their business assets. It is the only way to ensure that the investment you choose to make in your business is the only investment you make. Without proper planning, you can unintentionally invest everything into your business because of one mistake.

That is not to say that when you create a company you are protected forever. You must be careful to maintain the appropriate company formalities, make sure your company has enough money to exist apart from you, the owner, and make sure that you keep all your personal activities and the activities of the company separate.

The reason for the formality requirements is to keep you, the owner, from inadvertently subjecting yourself to personal liability. For instance, you must always sign agreements for the company in your official capacity with the company. If you neglect this important formality, you could subject yourself to personal liability related to your personal signature on the document.

I would also encourage you to “make it official” with the advice and ongoing counsel of a qualified attorney. You don’t want to take shortcuts playing with your assets. If it is time for you to “make it official”, you want to do it right the first time.

Starting a business – my overwhelming, inspiring, terrifying, amazing journey

Posted in: Blog, Startup by Brian Cauble on July 10, 2009

Just so you know, I am a bit exhausted at the moment.  I should probably be working (or sleeping) instead of writing this post.  But I want to tell you about my recent journey.

I have started a company, two in fact.  One of my companies is a mobile phone software development company called Appsolute Genius.  The other company is a non-profit called “Birmingham Entrepreneur”.  Sound familiar.   Why did I do it?  Because I caught the bug: the “I am passionate about these things and this is what I want to do with my life” bug.

Birmingham Entrepreneur started as a way for me to get more involved in the entrepreneur community in Birmingham and to keep me focused on entrepreneurship.  I never expected to love it so much.  I love doing it.  To most people it sounds like work.  I take time to meet with entrepreneurs, post blogs, post links and send tweets about entrepreneurship, look for sponsors, look for meeting locations, look for speakers, try to market the group.  It is actually a lot of work.  Work that I currently don’t get paid to do.  But it isn’t just work to me.  It is a passion and a mission.  I have a mission to make Birmingham Entrepreneur special.  I have a vision where Birmingham Entrepreneur can make a difference in this city and really help it grow.  It may sound crazy, but I believe it is doable and I believe I am the person to do it.

Appsolute Genius is my mobile phone software company.  Now I am a geek.  It took me a long time to come to grips with that statement, but I am.  I love technology and I love how technology improves our lives (when done right).  For example, Social media allows me to meet more people than ever and to keep in touch with friends and family I wouldn’t otherwise keep in touch with.  Mobile software allows me to run my life more efficiently and makes my life more fun everyday.  I love seeing how mobile technology is changing our lives.  I understand technology on a human (emotional) level, and I love it.

So now that you know what I am doing with my life, let me tell you what it has been like.  So many words come to mind: scary, exhilarating, lonely, fun, amazing, overwhelming, inspiring.  Many days I feel all of these emotions.  You will hear so many people tell you to be passionate about your business.  They are 100% correct.  Why?  Because it is extremely difficult and you will probably give up if you don’t love it and believe in it.  You have to be willing to do whatever it takes.  I am so tired as I write this, and I have doubts from time to time.  However, I know that this is the life I want.  And I know that whatever it takes, I will make it happen.

Why Use an Attorney?

Posted in: Blog, Legal Issues by Josh Andrews on July 9, 2009

When you decide to “make it official” and form a company, you have many options. You can do it yourself, you can ask someone who has done it before to help you (though the one helping you may be offering you legal advice, which is not good), you can use a document generating online service, or you can call a real-live attorney licensed to practice in your state. As an attorney, you can assume my answer is that you should contact an attorney. In this post I will tell you why it is the best option.

You know what you want, but you may not be certain how to achieve it. When you create a company, you must treat it as an entity separate from yourself. Depending on your entity selection, you may create hurdles to accessing what is yours as the owner. A qualified attorney worth the paper on which his law degree is printed will take the time to explain to you those options, and work to know what you want and how to achieve it. A document generator will not do that. A well-qualified lawyer should be able to discern what you mean from what you are saying. A document generator only thinks in “true” and “false” and only gives you what you ask for without discerning what you really mean.

You are not a lawyer. You do not have training in the legal facets of creating a company. Not that you couldn’t do it, but you need to focus on selling your product or service. One of the first steps to your entrepreneurial success is to realize your limitations and employ those who will complement your limitations. Asking a lawyer to work with you on the legal aspects of your company and your business is an investment worth making.

Getting it wrong can cost you everything. In the litigious world in which we live, you do not want a lawyer working to undo your personal attempt at your company’s formation. You want to know that your investment is protected because you did everything right. If you make a mistake, your liability shield may be found to not exist, and everything would be at risk.

It will cost more to correct a mistake than to make it right in the beginning. Reassembling a poor foundation can often take more time and energy and cost more money than ensuring it is proper in the beginning. Like I mentioned above, you want a lawyer making sure you are protected before someone else brings in a lawyer to prove that you aren’t.

Business owners are willing to ensure against many things, but they often overlook the insurance-like benefits of knowing that all of your legal foundations are firm. Never forget, it is much easier to defend from a firm foundation than it is if your foundation is questionable.