Are you looking for business formation services to set up a business partnership? Liability protection, income tax, and ventures that need a partnership agreement are key motivators for a new business. A business partnership is a relatively easy entity to set up, but it does have its drawbacks.
One primary drawback to setting up your business as a general partnership is that your personal liability as a partner is unlimited. This means that any debts of the corporate entity will be borne by the individual partners of the business.
If you’re considering setting up a business as a partnership, our law firm has helped numerous business owners figure out their tax status during their entry into the business world.
We talk with you from our initial consultation and review your personal assets and business issues like if you need to sell stock for your new business, or if your business idea helps you determine whether you may already be operating as a partnership, and if not, whether this corporate entity might be right for you.
What legal entity is right for your business activities?
Another common legal structure is the corporation. A corporation or limited liability company is a separate legal entity from its owners, and as such, the owners (or shareholders) are generally not personally liable for the debts of the corporation. There are different types of corporations, including C-corporations and S-corporations. C-corps have double taxation, whereas S-corps have pass-through of the company’s net income and is counted as personal income, but split up between the co-owners. S-corps can only have one class of stock, while a C-corp can have many different types of stock.
Our attorneys are experienced in business formation and can help you determine which type of corporation is right for your business, and help you set up and file all the necessary paperwork with the state. Contact us today to learn more about what limited liability legal structure is the right one for you and to get started on setting up your business.
What Type of Business Formation is Right For Your Business Structure
Our law firm can help any business owner choose the business structure for their ventures, whether sole proprietorship, s corporation, c corporation, or partnerships, a limited liability company (LLCs), and tax-exempt status non-profit corporations.
Each type of business entity has its own advantages and disadvantages, so it’s important to consult with a lawyer or an accountant versed in business formation to determine which one is best for your business.
We can help you choose the right business structures, file all the necessary paperwork with the state, and help you get started on running your business so you can get the tax benefits and limited liability that the right corporate legal structure brings.
Contact our law firm, Collateral Base, for the formation services that suit your goals for your limited liability partnerships.
Common points to consider when determining the right structure for your new business
- business formation attorneys can help business owners choose the right corp status for their business
- there are a variety of legal entities to choose from, including partnerships, limited liability companies (LLCs), and corporations
- Sole proprietors have no legal structure to provide liability protection and so no business formation services required.
- each type of business entity has its own advantages and disadvantages, so it’s important to consult with a business formation lawyer to determine which one is best for your business
- our business formation lawyers can help you choose the right business entity, file all the necessary paperwork with the state, and help you get started on running your business
Contact our law firm, Collateral Base, for business formation attorneys providing legal services that suit your goals.
Business Structures to Choose From When Forming Business
– When forming a new company, the business owner may select from several different types of structures: Sole Proprietorship General Partnership Limited Liability Company (LLC) Limited Liability Partnership (LLP) C Corporation (c corp), and Sub-chapter S Corporation.
The formation documents for each are slightly different because all these forms have different laws that control their operations. It really depends on the legal needs of the small business
– The differences between each of these legal structures center around a few main issues, including taxes imposed by the federal government, issues regarding raising capital, and the personal liability of the company shareholders.
– Regarding taxes, the business structure selected will determine whether business profits may be passed through to the shareholders of the business or if they are taxed at the corporate level.
– Another key difference between these structures is the amount of personal liability that the shareholders are exposed to. As mentioned before,
Corporations – what’s the difference between C-corps and S-corps?
C corporations are more commonly known as just corporations. These are usually what is talked about when someone is explaining a big business.
They are the classic company with the hierarchical structure that textbooks describe. When there is a need for a large or well-known company to be formed, a c corporation is the typical go-to option.
There are, however, other relationships that are often more mutually beneficial in such a way that a greater amount of revenue is earned either for a short time or a prolonged period. These usually come about through joint ventures that require protection from breach of contract lawsuits.
What is a joint venture?
A joint venture can take on many different forms, but it is essentially two entities coming together to cooperate on some level to achieve a common goal, often under the terms of a partnership agreement.
This cooperation can manifest in many different ways, such as one company providing the other with financial or technical support, or one company selling its products through the other’s distribution channels.
No matter what form a joint venture takes, both businesses involved should carefully consider the implications of entering into it.
This is especially true when it comes to the financial arrangements between the two companies. It’s important to make sure that both companies are clear on how any profits or losses will be shared and who is responsible for what costs.
If these details are not spelled out ahead of time, disagreements can quickly arise and damage the relationship between the two businesses.
What to do if you are looking for the right business structure for your new company.
If you’re thinking about forming a joint venture with another business, it’s important to consult with an experienced business lawyer.
Our attorneys can help with business entity formation so you can choose the right business entity, file all the necessary paperwork with the state, and help you get started on running your business. Contact our law firm, Collateral Base, for your corporate formation services that suit your goals.
Different types of business entities
There are a variety of business entities to choose from when forming a business, including sole proprietorships, partnerships, general partnerships, LLCs, C corporations (c corp), and subchapter S corporations (s corp).
The differences between each of these structures center around a few main issues, including taxes and the personal liability of the shareholders. A business formation lawyer can help you protect your personal assets and file formation documents properly.
Tax issues for different structures.
Regarding taxes, the structure of the business will determine whether profits are passed through to the shareholders or taxed at the corporate level.
Businesses that are set up as C corporations are generally taxed at the corporate level, while businesses that are set up as subchapter S corporations can pass their profits through to their shareholders without being taxed at the corporate level.
This is an important consideration for entrepreneurs who want to minimize their tax liability and take any tax exemption available to the owners.
Benefits of the right legal structure
Another key difference between these structures is the amount of personal liability that the shareholders, or other partners, are exposed to. In a sole proprietorship or a general partnership, the business owner is personally liable for any debts or liabilities that the business may incur.
This means that if the company is sued, the owner could be held liable for the damages. In a limited liability company or a limited liability partnership, the shareholders are not personally liable for any debts or liabilities of the business.
This can be a significant advantage for business owners who want to limit their personal financial exposure – avoid sole proprietorship if that applies to you.
It’s important to consult with a lawyer or an accountant versed in corporate formation to determine which structure is best for your business. Our law firm, Collateral Base.
We can provide you with an attorney-client relationship for a small business owner, a nonprofit corporation, a limited partnership, or any status that requires formal paperwork.
Conclusion
So, which structure is right for your business? It’s important to consult with a lawyer or an accountant versed in business formation to determine which structure is best for your business. At Collateral Base, we can help you make the right decision and get your venture off the ground. Contact us today to learn more.
