Choosing the appropriate legal entity is a crucial step when starting your business. How you decide to plan its legal structure is one of the most important decisions. The way in which your business is formed will determine the personal liability of the founders, how taxes are paid, and other important details. Each type of structure has its own benefits and considerations that are affected by the business’ size, the number of owners and employees, the industry, and other variables.
Making the right choices at the earliest stages of your business can help you avoid challenges later. I can help you understand the advantages of LLCs, partnerships and incorporation and handle all of the paperwork necessary to help you set up as the right type of business entity for your goals.Partnerships
There are several types of partnerships, including general partnerships, limited partnerships, and limited liability partnerships. A partnership business is a legal relationship formed by the agreement between two or more individuals to carry on a business as co-owners. A partnership is a business with multiple owners, each of whom has invested in the business. Some partnerships include individuals who work in the business, while others may include partners who have limited participation and limited liability.Corporations
Generally, there are two types of corporations: C corporations and S corporations.
C corporations are used mainly by larger organizations who desire to acquire capital from investors. C corporations are owned by its stockholders (shareholders) who share in the C corporations profits when the C corporation pays dividends. C corporations are taxed as separate entities apart from its shareholders.
S corporations are more often used by smaller businesses and the income of the business is usually taxed under the owners individual taxes.Nonprofit Organizations
A nonprofit corporation is any legal entity which has been incorporated under the law of its jurisdiction for purposes other than making profits for its owners or shareholders. One of the most common forms is 501(c)(3), which is set up to do charitable, educational, scientific, religious and literary work. This includes a wide range of organizations, from continuing education centers to outpatient clinics and hospitals.Franchises
Arrangement where one party grants another party the right to use its trademark or trade-name as well as certain business systems and processes, to produce and market a good or service according to certain specifications.Ready to Find out More?
For counsel who can effectively guide you through difficult business decisions and who can fight for you when disputes arise, turn to the Law Offices of Charles R. Frazier. To schedule a free initial consultation, call 615-267-0125.