Business
Legal Form
Selecting
your Business legal form should be done prior to
completing your business plan.It is one of the most important decisions
that
you and/or your partners must make for your company.
This should be determined by your assessment
of each and how
it benefits your business, and not necessarily the cheapest to
start or
acquire. Each
business form has its’
plus and minus sides, therefore, this process needs careful
consideration.
Legal
and Business implications will
vary with the form or entity that you select.
Some of these are but not limited to, the
business image, taxes,
Start-up costs, your personal risk and that of your partners or
investors, plus
government regulation, the size of your business, and your short and
long-term
goals.
These issues alone
demonstrate the
importance of why it is encouraged to consult an attorney from where
your
business is located.If you
have not
selected an attorney, get one that specializes in small business or
commercial
business. An
attorney that focuses on
bankruptcies or worker’s compensation, may be willing to do it cheaper,
but may
not be the best choice as your business lawyer.
Business “do it yourself” discs are everywhere
for 30 or 40
dollars.
These are easy to
understand and cover
most business forms. However,
it is
highly advisable to let an attorney, at least review, before you submit
any “do
it yourself” paperwork. It
may bind you
into something that will adversely affect the business or your
relations with
any partners or investors.
The main forms of
business are: Sole
Proprietorship, Partnerships (General
and Limited), Limited Liability Company, Corporation (C-Corp), and
Subchapter
S-corporation (S-Corp).
The
above mentioned are most commonly used but other forms do exist such as
a
Business Trust, Close Corporation, Non-Profits and a combination of
others,
that often times, address specific risks or liability.
For
a more in depth breakdown of each of theses forms of business
(click
here)
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