Running your own business demands a lot of perseverance and determination. This often leaves little time to deal with the legal issues that constantly plague small businesses. Having a business law attorney on your side can make a huge difference in the day-to-day operations of your business, helping you deal with a wide range of issues related to taxes, finance, business formations, acquisitions, mergers, employment/labor laws, contract negotiations, and litigation.
Types of Business Structures
There are many different ways that you can structure your business. If you are just starting out and aren’t sure what structure would be best for your circumstances, or have been in business for awhile and need to restructure your business, an experienced business law attorney can help. Major types of business structures in the United States include:
A sole proprietorship is a simple business structure that allows a person to conduct business as his or her self. Under this structure the owner and his or her company are viewed as one and the same. While this is an easy way to start doing business, it is important to be aware that a sole proprietorship does not protect the owner from any business liabilities.
A partnership is a simple business structure for businesses with more than one owner. There are two types of partnerships: general partnerships and limited partnerships. When considering this business structure, understand that owners maintain personal liability for the business. Owners with limited partnerships may face limited liability.
Forming a corporation establishes a business as a separate legal entity, providing owners with limited liability protection. There are two types of corporations: C-corporations and S-corporations. There are several key differences between these two types of corporations, including tax issues and shareholder restrictions.
Limited Liability Company
Limited liability companies establish businesses as separate legal entities from their owners, but allows owners to report business gains and losses on their own personal tax returns. Owners are shielded from business liabilities under this structure; however, LLCs are not available in all states.