Opening a small business today requires a big helping of optimism mixed with endless late nights and just about all of the money one could beg or borrow. There have certainly been better economic times for businesses of all types, let along a start-up business. This makes it more important than ever to do everything right, as far as is humanly possible.
One of the most important decisions any business owner can make is also one of the very first decisions. What is the best form of business enterprise for this new business? Each has its advantages and disadvantages. Just as all large businesses have lawyers at their beck and call, a small business should also have Business Law Lawyers in Rochester NY, who understands their business.
The most common types of business enterprises are listed below. It is possible to change business type later, but it’s much easier if that isn’t necessary.
1. Sole Proprietorship: This is a fairly common choice for one-person businesses. It is simple to set up, involving little more than a name choice (in most cases) and filing a few forms to receive a business license. The downside is that the business owner is personally liable for all claims against the business.
2. Partnership: There are two types of partnership: General and Limited Liability. In a General Partnership, the partners share management of the company as well as personal responsibility for the obligations of the business. In a Limited Liability Partnership, there are both general and limited partners. Limited partners do not manage the business, but share in profits. Losses are limited to their investment.
3. Limited Liability Company (LLC): This combines the tax benefits of a partnership with the protection of a corporation. The LLC can be taxed in different ways, so this should be discussed with someone familiar with an LLC.
4. Corporation: Corporations are more complicated, but offer liability protection to shareholders as well as certain tax advantages.
5. S Corporation: This is the choice of many small businesses because it is set up as a corporation but is taxed as a partnership.
Dibble & Miller, P.C. is a full-service law firm that focuses on business law. Visit the site to learn more about how your business could benefit from the services of these Business Law Lawyers in Rochester NY, or contact the firm to schedule a free initial consultation.
