Form The Entity That Is Right For You
Perhaps you have plans to start a business, but do not know where to start or perhaps you have an idea of the business entity you would like to form, but need further advice and information about your decision.
While you have many options, a few entities are especially noteworthy for small, owner-operated businesses:
Limited liability company (LLC)
Limited liability companies are an excellent choice for many small-business owners. They can have multiple partners or you can choose to be the sole owner.
The advantage of an LLC is the protection of your personal assets. If the company accumulates debt or encounters legal issues, you never have to use your own money to settle the matter.
However, you will have to report the company’s earnings on your personal tax return.
This type of business entity can be run only by sole business owners so you may not have partners or co-owners. You are personally liable for debts and any lawsuits, but your business is not taxed, so all profits go directly to you.
Because of personal liability, you will want a lawyer’s advice on this type of entity versus an LLC to know which type best suits your plans.
A partnership always has at least two individuals who own the business, and partners may help with operations, depending on the type of partnership you form.
Like a sole proprietorship, you are personally liable for debts and lawsuits, but the burden is divided among every partner. The challenge with this type of business is removing a partner if one wishes to leave or is forced out and the potential for the business to fail if this happens.
Choose A Trusted Lawyer And Adviser
Attorney Jon R. Parsons has helped form and advise businesses all over the world. With his extensive experience, you can trust in his ability to set your business up for success.