Sacramento restaurant owner Randy Paragary has announced that he is going to close Cosmo Café on Dec. 17. In its stead, he plans to open a Café Bernardo about 60 days later. But it is unlikely that all Paragary has to do is redecorate and change the name. Business formation just is not that simple.

If Paragary is starting a whole new restaurant, as it seems he is, and his restaurant is an entity unto itself (as opposed to being owned by a management company), then he has quite a few T's to cross and I's to dot.

First, he will probably need to arrange with a financial institution to get the lines of credit and other financial instruments his new restaurant will need. Second, he will have to hammer out agreements with suppliers and vendors, which means there will be many contracts and a lot of negotiating. He is going to have to hire employees, so it would be a good idea to draft some sound employee policies and generate employment agreements. Finally, he will have to decide whether he is doing this on his own (i.e. is it a sole proprietorship?) or whether he will be doing it with partners (i.e. is Café Bernardo a joint partnership?) In the alternative, he may decide to incorporate.

All those concerns, of course, are on top of the regular priorities one must address when opening a restaurant, such as selecting a theme, generating publicity and coming up with a creative menu. Obviously, new business owners have a lot on their minds. This is why many of them choose to work with attorneys who are familiar with business and corporate law. Having someone on board who knows what he or she is doing really helps.

Source: The Sacramento Bee, "Paragary's Cosmo Café to close and become a Café Bernardo," Bob Shallit, Dec. 6, 2011