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Business Ownership Structures to know about before starting a business in the New Year
If 2021 will find you starting your own business, you’ll quickly learn there will be many decisions to make along the way. One of the most important is the ownership structure you select since this can play a major role when paying taxes, protecting you against liability after an accident, and many other situations. Depending on the type of business you open, whether or not you will have partners involved with your business, and your specific financial situation, it will be beneficial to learn more about what structure will best suit you and your needs. To get the details you need to make an informed decision, turn to business attorneys in Palm Harbor FL from The Law Office of Robert Eckard & Associates.
If you will be running your business as a solo operation, you can be like most people and choose a sole proprietorship as your business structure. However, if you will have others also acting as owners, you may want to consider a Limited Liability Company, better known as an LLC. Though both offer large amounts of flexibility in how the business can be run, an LLC will be easier to operate if you will have partners. To begin with, an LLC gives you the option of having all owners involved in the day-to-day operations of the business, or will instead allow you to appoint certain owners to run the business while others choose to remain only as investors.
To ensure you and your other owners are on the same page prior to starting your business, go over all necessary details with an experienced Palm Harbor business attorney.
In most situations, a sole proprietorship will have fewer financial needs initially than an LLC, corporation, or even a partnership. Therefore, take your financial needs into consideration before deciding on your business ownership structure. As an example, if you will require bank loans to get your business started, chances are the bank will look more favorably on you if you have formed an LLC, since it will know this type of structure will protect you from certain financial liabilities. To discuss which structure would be best for your business, look to a knowledgeable Palm harbor business lawyer for guidance.
Paperwork and Expenses
If you are wanting to start your business with as little funding and paperwork as possible, a sole proprietorship or partnership are much easier structures to use. However, if your business will be a bit more complex, you will likely need to work closely with Palm Harbor business attorneys to form either an LLC or corporation. Yet when forming either of these businesses, you will need to pay close attention to the paperwork and expenses associated with each. For example, forming an LLC or corporation will often require fees that could approach $800 in some states, and will also require the filing of formal documentation and the election of officers to run the company.
You Can Change Your Mind
For many new business owners, one of the most common mistakes they make is assuming the business structure they initially select must be the only one they can ever use for their business. However, the fact is you can at any time change the ownership structure of your business. For example, if you start out as a sole proprietorship but experience tremendous growth, you can change your structure to a corporation or LLC. Prior to doing so, however, speak to Palm harbor business lawyers you know and trust.
To get your questions answered about various ownership structures, consult soon with business lawyers in Palm Harbor FL at The Law Office of Robert Eckard & Associates.