Selecting the legal structure for your business is one of the most important decisions, you will make. While it does not have much impact on the day-to-day operations of a small business, it can have a tremendous impact come from taxes, when you want to borrow money or attract investors, or in the event unfortunate you get in the courts. It is possible to change your structure at a later date, it can be a difficult and costly process. Better to make the right decision in the first place.
In the United States, you are not required to have a lawyer prepare and submit documents to create structures listed below. In fact, there are many books and other products available to help you make the deposit yourself, as well as many Internet services that will do for you. However, according to the size and complexity of your business, you may want to consult a lawyer, and you should certainly consult with your tax advisor which structure is best suited to your situation. This article cannot possibly answer all your questions, but it will help you to determine the right to apply to a qualified professional.
Here are the basic forms of the property of the United States companies. There are variations from one State to another, be sure to check with your State Secretary of State Office the exact details of your state.
Sole Proprietorship. Each owner of an unincorporated business operates the business as an extension of himself. The profits and losses of the company are reported on the statement of the owner - there is no separate deposit of the company. The owner is personally liable for all liabilities of the company. If someone sues the company for breach of contract, injury, or to collect a debt, the Court may impose directly personal bank account and other assets of the owner. The main advantage of individual enterprise is that it is the simplest structure and less expensive, since there is really nothing to configure and maintain, except perhaps a fictitious business name (aka DBA or doing business as).
Corporation. Two or more persons own the company jointly and share the profits and losses of the business, such as set out in the partnership agreement. Each partner is potentially liable for all the debts of the company, i.e., a creditor can collect all of the debt of the company of the partner who is easy to perceive. Distribution of profits and losses is determined by the partnership agreement and passes through the individual partners. He did not match the percentage of property. The partnership itself is not subject to any income or franchise tax. Control of the business is determined by the agreement of partnership, but unless otherwise stated, the partners to control the company jointly, with each partner having an equal vote. The advantage of partnerships is that, as a sole owner, no deposit of the State company is required to create the business entity, or is in progress on the reports.
Limited partnership. The basic structure and the tax implications are the same as for a partnership, but allows the limited partnership to one or more sponsors, or "silent partners", have a part of the business, but not participate in the management of the company. The partnership must also be a general partner who is personally liable for all the debts of the company. This structure allows a partnership to have outside investors without subjecting them to the liabilities of the company.
Limited liability partnership (LLP). The LLP is a fairly new structure that appears as a result of the application of the Attorney and accounting of the business to be able to limit the responsibility between partners (Attorney and accounting of the companies were not allowed to integrate, but they are now). An LLP is taxed as a partnership, but limits the liability of all partners as a LLC. However, at the moment, LLP laws vary considerably from one State to the other. For example, in California and New York only allowing this form of Attorney and accounting firms. In many other States, partners in an LLP only to have a "limited shield" and do not benefit from the same protection as they would in a corporation or an LLC. These restrictions are the LLP generally only a good choice for the Attorney and the accounting firms, at least in the States with the law limited shield. Check with your Secretary of State to the details of your state.
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