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Uncle Sam Is Your Silent Partner
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Uncle Sam Is Your Silent Partner
When you’re in business, in addition to any people who have ownership interests in your company, the government—federal, state, and local—is your silent partner. Like all partners, the government wants its share of your profits, which it takes in the form of taxes. But like any good partner, the government may help you in your business.
Here are five important ways that your silent partner can provide important assistance to you:
1. Protect your personal assets. You can set up your business in a way that your personal assets cannot be reached by creditors of your business. The two main entity types that offer you personal liability protection include: corporations (both C and S types) and limited liability companies.
These entities are set up under state law. If you set up an entity in a different state, you’ll have to register to do business within your state.
2. Protect your intellectual property. Intellectual property (IP) is made up of the assets you can’t see or touch but which have great value to your business. They include patents, copyrights, trademarks, trade names, customer lists, business processes, organizational structures, and other intangible assets (especially your brand). Today, for many companies, IP accounts for 60% to 80% of the value of a business.
The government provides ways for you to obtain special protection for certain types of IP. You can see to some types of protection yourself; for others (such as patents) it is highly advisable to use the assistance of a knowledgeable attorney.
- Trademarks and patents: Find information about protection for these assets at the U.S. Patent and Trademark Office.
- Copyrights: Find information about copyrights at the U.S. Copyright Office.
3. Help with financing. The U.S. Small Business Administration provides loan guarantees to commercial lenders as incentive for them to make loans. These loans generally are restricted to companies that have been in business for several years and are basically financially solid:
- 7(a) loans: The basic loan program provides financing for equipment purchases, working capital and for the purchase of an existing business.
- 504 loans: This is a long-term financing program for businesses that buy such assets as buildings or heavy machinery.
- ARC loans: Under the America’s Recovery Capital (ARC) Loan Program, the SBA can make direct short-term loans to businesses up to $35,000 to help them make payments on existing debt.
4. Help with permits and licenses. In order to operate legally, you may need certain permits or licenses. Usually, requirements are fixed on your state or local level. Find the licenses and permits you’re required to have by going to Business.gov (enter your zip code and business type to see requirements in your area).
5. Help with exporting. According to the Small Business Administration, small businesses account for 97.3% of all U.S. exporters and produce 28.9% of the value of exports. The SBA provides resources and assistance to small business exporters, including U.S. export assistance centers and a working capital loan program.
Barbara Weltman is a respected corporate speaker, contributing editor, author of more than a dozen books from major publishers, sought-after expert media source, newsletter publisher, and a trusted advocate for small business owners.
About the Author:
Barbara Weltman is an attorney, prolific author with such titles as J.K. Lasser's Small Business Taxes, J.K. Lasser's Guide to Self-Employment, and Smooth Failing as well as a trusted professional advocate for small businesses and entrepreneurs. She is also the publisher of Idea of the Day® and monthly e-newsletter Big Ideas for Small Business® and host of Build Your Business Radio. She has been included in the List of 100 Small Business Influencers for three years in a row. Follow her on Twitter: @BarbaraWeltman.