As an entrepreneur, one of the first and most important decisions you will have to make when starting a new company is deciding what type of business entity is right for you. Your choice of business entity will impact all aspects of your new company, including taxes, personal liability, and more. It is critical that you speak with an experienced business law attorney prior to making a decision on your business entity to ensure that you are fully informed and for help submitting all of the necessary paperwork to get your company off the ground. To learn more, call or contact The Soto Law Office in Altamonte Springs today.
A sole proprietorship is an option for a small business that is run by a single person. There is very little paperwork involved in establishing a sole proprietorship business, but the owner of this type of business entity has no shield from company liability. This type of entity is also only appropriate if there is a single owner of the business.
A general partnership is an option when two or more people own the business. In a partnership, the owners of the company share in the liability and tax implications of a general partnership business. Paperwork must be filed with the Secretary of State’s Office in Florida, and terms regarding the split of ownership, role and responsibilities, methods of settling disagreements, and all other pertinent issues should be drafted as part of the formation of the entity.
Limited Liability Partnership
A limited liability partnership combines the benefits of a partnership with those of a corporation. This entity is typically used by professionals forming a business, such as accountants or doctors. Each partner invests in the business and has an ownership share, but the company itself is a separate legal entity. This shields the partners from liability when it comes to the actions of the business or other individual partners.
Limited Liability Company
A limited liability company combines the benefits of a sole proprietorship or partnership with those of a corporation. This entity allows for the owner or owners of the business to file simple tax returns and maintain simple bookkeeping while also maintaining the liability shield of a corporation. Owners of this type of entity pay personal income taxes and avoid the double taxation of a corporation.
A corporation is an entirely separate legal entity from its owners. A corporation pays its own taxes and is held liable separately from its owners and shareholders. Articles of Incorporation and By-Laws must be submitted to the state’s Secretary of State Office, and the corporation can either be privately or publicly held. The company is taxed at the corporate tax rate.
Contact Our Office Today
If you would like to talk to an experienced business law attorney about what business entity is right for your new venture, call the office or contact us today at The Soto Law Office in Altamonte Springs.