You are about to create and establish your new business. You are finally your own boss and finally able to follow your business dream. You have probably already figured out that the legal side of starting a new business is not as simple as it may have seemed. Golo Legal explores different types of business structures to help with this complicated legal journey.
What is a ‘Sole Proprietorship’?
A Sole Proprietorship is the easiest of all business structures to understand and is the most common.
- Not a Legal Entity
- Owner Is Responsible For All Assets and Liabilities
- Can Operate Under Owner’s Name or A Fictitious Name (You Will Most Likely Need To File This Name)
- Easy and Inexpensive To Create a Sole Proprietorship
- Easy Tax Preparation
What is a ‘Limited Liability Company’ or ‘LLC’?
An LLC is
- Not Taxed As A Separate Entity
- All Profits and Losses Are Passed Through to Each Business Owner (Otherwise Referred To As ‘Members’)
- File Articles of Organization
- Business Names To Follow These Rules:
- Must Be Different Than An Existing LLC In State
- Must Indicate It Is An LLC
- Not Include Words Restricted By State
- Must Obtain Licenses and Permits
- Create an Operating Agreement
What is a ‘Partnership’?
A Partnership is relatively easy to understand. It is one business where two people share ownership. There are three types of partnerships:
- General Partnerships
- Profits, liability, and management duties are equally shared by partners. If this is unequal, it must be documented.
- Limited Partnerships
- Allow partners to have limited liability as well as limited input with management decisions.
- Joint Venture
- Joint Ventures are for a limited time only. If partners are willing to continue, it must be filed.
Visit US Small Business Administration to learn more about Corporations, Cooperatives, S Corporations, and for more detail on the above types of business structures.
If you would like to learn more about different types of business structures or are interested in Golo Legal assisting you in different types of business structures, please contact us.
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