A solid foundation is essential for any building. Building a business is no different. It is no coincidence that there is a column in the logo for the Kramer Law Firm. We are committed to helping you build a strong foundation for your start-up business.
Business Organizations - An Overview
One of the first issues that any business owner needs to address is choosing a business organization.
The type of organization will affect a variety of important issues including how the business handles tax matters and whether there is any protection against personal liability. Business owners should also consider how many individuals are involved with the business, the type of business, and insurance.
A business attorney at the Kramer Law Firm in Seminole County, Florida can help you choose the type of business organization and can handle the legal concerns so that you are able to focus on getting your business off the ground.
Call us today at 407.834.4847.
The most common business organizations for a business are:
- Unincorporated - An unincorporated business may either form as a sole-proprietorship or a partnership.
- Incorporated - Incorporated businesses generally form as either a C-Corporation or an S-Corporation, depending on tax considerations.
- Limited Liability Companies (LLC) - An LLC is a hybrid of the incorporated and unincorporated business structures, and may provide flexibility.
At the Kramer Law Firm we believe that an informed client is a happy client. We take the time to consult with clients, understand their short term and long term goals, and then help our clients in achieving their goals.
Sole proprietorships are the most common business structure in the United States. This is mainly because they are easy to create. The IRS considers a sole proprietorship and the business owner one entity. Thus, any business income is reported and paid on the business owners personal tax return.
Additionally, the business owner is personally liable for any debts that the business owes. Alternatively, creditors of the owner may attempt to seize business assets in order to satisfy the owner's personal debt. The greatest drawback to a sole proprietorship is personal liability.
Partnerships are usually a limited or general partnership. The IRS considers a general partnership as a business run by two or more sole proprietors, each sharing liability. Like sole proprietorships, owners are on the line for business liabilities.
In a limited partnership, each limited partner is only liable for the amount that partner has contributed to the business. However, a limited partnership must include at least one general partner.
A corporation is a business entity created through a Florida Law. Incorporating a business creates a distinct and separate legal entity from the individual incorporator. This separation may shield business owners from liability that the business incurs.
However, it is essential that the corporate documents be prepared correctly and kept up to date, in order to protect shareholders from personal liability.
One of the benefits of a corporation is the ability to raise money from investors by selling shares of the corporation to investors. A corporation is usually run by a board of directors and officers.
Limited Liability Companies
The LLC is a relatively new legal concept. The LLC combines aspects of unincorporated entities, including the ease of operation, with those protections and advantages offered by corporations.
One advantage of an LLC is that it allows owners to choose whether to treat the LLC as a partnership for tax purposes or as a corporation; either way the LLC still offers its owners limited liability protection. LLC owners are liable only for the amount invested in the LLC.
The above is just a brief introduction into some of the considerations involved in choosing a business structure. A business formation attorney at the Kramer Law Firm can provide you with the expertise necessary to select a business type and then make a business plan into a reality.
At the Kramer Law Firm we strive to build long term relationships with our business start-up clients. If you are starting a business in the Orlando area and need a lawyer's assistance, please contact the Kramer Law Firm.
Contact a Seminole County Business Lawyer at the Kramer Law Firm
Make sure your business plan is designed to effectively meet your needs. Contact a business attorney at the Kramer Law Firm at 407.834.4847 in Longwood, Florida, to discuss your business formation needs.