Starting a business in Oklahoma is exciting, but it also comes with big decisions. From choosing the right type of business formation to understanding your tax obligations, there are important steps that can set you up for success (or headaches if you skip them).
To help, we’ve outlined the Top 10 things every entrepreneur should consider when starting a business in Oklahoma. Whether you’re thinking about creating an LLC in Oklahoma, forming a business partnership, or launching a business corporation, these tips will help you start strong and avoid common pitfalls.
1. Type of Business Formation
When you start a business in Oklahoma, one of the first decisions is choosing your structure: a business partnership, an Oklahoma limited liability company (LLC), or a business corporation. Each type has different benefits and risks, so it’s important to align your choice with your goals.
2. Tax Treatment
Business taxes vary depending on the entity you form. For example, an LLC in Oklahoma may be treated differently than a corporation or partnership. Work with an accountant to understand how your structure impacts tax obligations and cash flow.
3. Management Decisions
Who will manage your business? Whether you’re forming an Oklahoma LLC or a corporation, you’ll need to define how decisions are made and who has authority to act on behalf of the business.
4. Breadth of Management
Decide how much authority managers or officers should have. For example, can they make large purchases or borrow money without the approval of all owners? These rules help prevent misunderstandings later.
5. Non-Competition Agreements
Oklahoma law allows co-owners to agree not to compete within a certain geographic area. However, non-compete agreements with employees are generally unenforceable here. Understanding these laws before you start your business in Oklahoma can protect you from future disputes.
6. Dispute Resolution Between Owners
Many businesses start with two owners, but disagreements can quickly stall operations. Planning ahead with a clear dispute resolution process can save you from expensive conflicts down the road.
7. Commercial Insurance
Different states require different insurance coverage. It’s wise to contact a trusted business insurance agent in Oklahoma who can help determine which types of coverage your company should consider based on your industry and specific risks.
8. Key Person Insurance
If your business relies heavily on one individual, consider “key person” insurance. This policy provides financial protection if that person leaves or passes away, ensuring the business can continue operating.
If a co-owner leaves, a buy-sell agreement ensures a smooth transition. It outlines how ownership interests will be valued and transferred, helping prevent disputes among surviving owners or heirs.
10. Bookkeeping and Accounting
Unless you have strong financial training, outsourcing your accounting and bookkeeping can be a smart move. Accurate records are essential for compliance, taxes, and long-term success.
How We Can Help
At Ball Morse Lowe, we understand the challenges of starting a business in Oklahoma. Whether you’re weighing the pros and cons of creating an LLC in Oklahoma, forming a corporation, or entering into a business partnership, our team provides clear guidance every step of the way.
Contact the Ball Morse Lowe today to learn how we can help you start and protect your Oklahoma business.