Many businesses start out as small side hustles without the intention of growing into full enterprises. It can be a wonderful surprise when a tiny venture starts to grow into a full-fledged business. However, this growth comes with certain questions and risks, too, as more people and money become involved. There are a few things that owners of growing businesses in Michigan can do to protect themselves as they start to see some success. One of the first steps here is to register the business.
Here are a few reasons why registering the business is so important:
- It shows credibility: Registered businesses are, simply put, taken more seriously. Customers are more likely to consider a registered business for larger purchases, as they will see it as a true business rather than just buying from a neighbor with a hobby. Owners also benefit from this change in perception, as it can help them think about their venture in a more serious way.
- It makes it possible to apply for loans, grants, and business support programs: Grants and loans can be critical to the growth of a business, especially when there is a need to scale up operations. Registration is almost always required to apply for such programs and services, so it is an important first step in accessing capital.
- It makes it possible to open business bank accounts: A registered business will result in an employer identification number (EIN). This number is needed to open accounts on behalf of the business, which is important to keep business expenses separate from personal accounting.
Once a business is registered, owners should look into other steps such as putting together high-quality contracts, registering trademarks and putting together a plan for what should happen to the business if the owner were to pass away or become incapacitated. These types of actions will protect not only the future of the business but also the individual or individuals who own it. To better understand how to legally protect a growing business, including any legal questions about registration, Michigan business owners may benefit from speaking with an experienced lawyer.