Excitement is definitely warranted when you are thinking about starting a business in New York.
Entrepreneurs with good ideas and the ability to work hard toward their goals may be uniquely suited to gain success. But, you have to start somewhere.
The legal process of forming a business can seem daunting for many people. Understanding some of the basic terms can help take the mystery out of much of the process.
“Closely held business” defined
One term that our readers have probably heard before is “closely held” business or corporation. So, what does that mean?
Well, in short, a “closely held” business or corporation is a small business – one owned by an individual or perhaps by just a few people, maybe even family members working together, for example.
Unlike mega-companies like Apple or Microsoft, closely held businesses do not have shares or stocks trading on the securities market.
The owners of a closely held business answer only to themselves when it comes time to abide by operating agreements, examine tax liabilities or understand their company’s valuation, for example.
The interests available in these types of businesses are usually limited to a select, small number of people.
Unfortunately, the smaller nature of a closely held corporation means that there are oftentimes fewer people involved in looking after the best interests of the company.
Even in the formation process, legal pitfalls abound.
For those in New York who are looking to start a business enterprise, looking into some of the legal terms and realities of the process can be hugely beneficial.