14

Failure to Check Your State to See If Someone Has the Company Name You Want

13

Failure to Set up the Right Tax Entity for Your Business: Delay in Filing Appropriate Tax Documents

12

Failure to Set up the Right Tax Entity for Your Business: Not Knowing You Have a Choice as to How Your Company Will Be Taxed

11

Failure to Set up the Right Tax Entity for Your Business:Not Knowing the Limitations of Each Entity

10

Failure to Select the Right Tax Entity for Your Business

Why This Mistake Will Hurt Your Business:

In a nutshell, you may have to pay a lot more taxes if you choose the wrong entity. Also, investors might not be as interested in your company because of reasons like -- they might have to file a bunch more state tax returns if you pick the wrong entity.

8

Failure to Set up the Right Entity for Your Business: Not Choosing or Choosing Nonprofit When Other Entities Were a Better Fit.

7

Failure to Set Up Your Entity In the Right State

Why This Mistake Will Hurt Your Business:

In most cases, it’s not going to have a material impact on your business. But sometimes you hurt yourself by having to pay high setup and annual fees in two states rather than one.

6

Failure to Set up the Right Entity for Your Business: Choosing LLC When Corp Was the Better Entity

5

Failure to Set up the Right Entity for Your Business: Picking an Entity When Being a Sole Proprietor Makes the Most Sense

Why This Mistake Will Hurt Your Business:

It’s not a huge deal. But, if you’re starting your business on a microscopic budget, every dollar counts. And if you just have this business as a hobby with no liability risk, losing those extra dollars can be pointless.

4

Failure to Select the Right State Law Entity for Your Busines

Why This Mistake Will Hurt Your Business:

Besides the possibility of tax concerns, choosing the wrong entity can cause management issues, make it harder for people to invest in your company, cause complications when trying to issue equity to other owners, and a myriad of other reasons.

3

Failure to Keep Your Business Finances Separate from Your Personal Finances

Why This Mistake Will Hurt Your Business:

You could lose all your liability protection. To keep that protection, you have to follow certain procedures, one of them being a requirement to keep your business finances separate from your personal ones.

2

Failure to Assign IP to Your Company

Why This Mistake Will Hurt Your Business:

This mistake could cost you your entire value of your business. Imagine if a co-founder or contractor created the IP you thought your company owned. Then you got in a dispute and found out they owned everything, the company owned nothing.

1

Failure to Set up Your State Law Entity

Why This Mistake Will Hurt Your Business:

Without an entity, you could incur personal liability that could otherwise be avoided. You won’t be able to “pass on” your business if something happened to you. And your business won’t get as much credibility as it deserves.

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