When owners are setting up a business or restructuring, there is a lot to think about. Although the substance of the business is probably the most interesting and compelling to think about, owners can’t afford to skip over giving proper attention to the formation of the business entity. Determining which structure is most suitable and then ensuring that the entity is set up correctly is the first step toward running a successful business.
At Moravcik, Threadgill & Starry, we can help you determine which business structure (a sole proprietorship, partnership, limited liability company, C corporation, or an S corporation) is most beneficial.
A sole proprietorship is the simplest type of business entity, which leads many people starting up small businesses to overlook important considerations. There is no formal process to create your sole proprietorship as there would be to form your corporation or partnership, but it is important to look into licensing, insurance, and other requirements that may be specific for your area.
A partnership requires that partners establish an agreement that designates rights and responsibilities of each partner/member. If you choose to establish a partnership without going through the proper channels, you could be dealing with costly issues down the road, including business disputes.
A limited liability company (LLC) is a simplified type of corporation that provides some tax benefits and protections from personal liability of a corporation, but more independence, such as that granted to a partnership. When forming an LLC, you are required to file articles of organization with the Secretary of State or other department of the relevant state government.
More formal and traditional corporate forms are available as well. To determine what may best suit your business, contact us today.
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