Dedicated To Your Success
We offer seasoned representation to our clients that helps them achieve their desired outcomes on all real estate, business law and construction law matters

Which business structures are right for you?

On Behalf of | Jul 1, 2022 | Business Law |

When starting a company, you need to consider your business structure. In some cases, you may need to figure out a structure before registering the business.

According to the U.S. Small Business Administration, several structures to consider.

Limited liability company

Choosing an LLC for your structure protects you from personal liability. When you own an LLC, you generally do not have to worry about your assets if your business faces lawsuits or bankruptcy. If you have a medium or high-risk business, you may want to consider an LLC. In addition to asset protection, you may pay a lower tax rate than corporations.

Partnership

If you have one or more other people who want to start a business with you, consider a partnership. Partnerships have simple structures with two common kinds, including limited partnerships and limited liability partnerships. A limited partnership has only one partner with unlimited liability and others with limited liability.

Corporation

Corporations are separate entities from the owners. They can make their own profit, have their own taxes and have legal obligations. If you want protection from legal liability, a corporation has an owner’s best interests in mind. Corporations have to pay income tax on profits.

Sole proprietorship

If you own a business by yourself and want complete control, you may consider a sole proprietorship. Sole proprietorships do not have a separate business entity. As a sole proprietor, you have a personal stake in your business. If you face a lawsuit or go into debt, creditors may go after your personal assets. Sole proprietorships may benefit those in low-risk benefits.

Choosing your business structure depends on the liability you want and how much you want to pay in taxes.