There are several ways that a business can be structured in the U.S. or Canada, depending on your state or province. The type of business structure a company chooses can impact various aspects of the company’s operations, tax obligations, and other issues. Choosing the right business structure could also protect you from personal liability and can create a distinction between business assets and debts and personal assets and debts. This is why it is important to choose business formation and structure carefully and to consult with a lawyer if you are not sure which structure is right for your business. What are some business structures available?
- Sole Proprietorship: A sole proprietorship means that there is no legal distinction between the business owner and the business. With a sole proprietorship, business liabilities and personal liabilities are not separated. Many business owners just starting out, begin with sole proprietorships. However, if your business is growing, or if you are not the sole owner of the business, other business structures can be considered.
- Partnership: If two or more people own a business, another business structure is a partnership. Limited liability partnerships give limited liability to each owner of the business. This type of partnership arrangement can protect the individual business owners from liabilities that arise from the partnership.
- Limited Liability Companies: Only available in the U.S., limited liability companies can protect owners’ personal assets if the business encounters lawsuits or if it cannot pay its debts. According to the U.S. Small Business Administration, an LLC might be a good option for a higher risk business that doesn’t want to pay corporate tax rates.
- Corporation: Corporations offer the greatest protection to individual owners from liability, but these companies are subject to strict laws regarding formation, structure, and can be costlier to manage. There are many different types of corporate structures available, and the type of corporate structure a company might choose will depend on the company’s size and needs.
Once a structure has been chosen, The Bobb Law Firm PLLC can assist you with:
- Articles of Organization
- Operating Agreements
- Employer Identification Number (EIN)
- Publication Services
- Certificates of Good Standing
What business structure is right for your business? If you are thinking of restructuring, or are just starting out, The Bobb Law Firm PLLC may be able to help you. Contact our business law firm today to learn more.
Speak to a Business Law Firm Today
When doing business in the U.S. or Canada, companies may need to take a range of things into account. There may be laws and regulations regarding hiring and firing employees, laws and regulations surrounding the types of licenses and permits required to do business, and different formalities regarding state/provincial law, federal law, and more. Having an experienced law firm help you navigate these laws can be helpful, especially if you are just starting out. The Bobb Law Firm PLLC can review your business structure, contracts, and address other questions. By preemptively addressing issues, companies can possibly prevent costly litigation, unexpected taxes, and other issues. If issues arise, having the right structure in place can protect a company in some cases. Have questions? The White Plains NY business Lawyers at Bobb Law Firm PLLC may be able to help you.