We are expert Business Formation Startup Attorneys near Reading, PA. When starting a business, one of the most important decisions you will make is what type of structure to choose for your business. That’s because the type of business you choose:
- can have significant tax consequences; and
- has benefits and drawbacks that could affect how your business flourishes and grows.
It’s important to consult with our experienced Business Formation Startup Attorneys. We have 40 years’ experience helping businesses in Reading, PA , Berks County and Lancaster County decide which type of business formation is best.
Five Basic Types of Business Formations Recognized by The IRS
1) Sole Proprietorship
Many small businesses start out as a sole proprietorship. You…
- are the sole owner of the business;
- retain maximum control;
- retain all the profits of the company; and
- importantly, take on all risks and liability.
2) Limited Liability Corporation (LLC)
Limited Liability Corporations are attractive to many entrepreneurs. That’s because LLC’s are a good mix between a Corporation and Sole Proprietorship structure. Here’s why…
- it protects you from liability like a Corporation can but without the double taxation of a Corporation;
- it’s flexible; and
- lastly, in some cases the tax liabilities with an LLC can be greater than the liabilities involved with a Corporation (our expert LLC Business Formation Startup Attorneys can explain ways to distribute profits that minimize taxes).
You need the advice of our experienced LLC Business Formation Startup Attorneys. You want to be sure you set your LLC up properly so you’re protected from liability.
In a Partnership two or more partners:
- are liable for the business responsibilities and debts;
- entitled to profits; and
- importantly, responsible for the liabilities of the other partners.
Businesses interested in forming a Partnership should consult with our Business Partnership Formation Startup Attorneys. You want to make sure the Partnership Agreement protects you as much as possible.
4) Limited Liability Partnership (LLP)
In a Limited Liability Partnership:
- There is generally a Managing Partner and one or more Limited Partners.
- Limited partners cannot manage the business.
- Limited Partners are not liable for the debts and legal responsibilities of a business.
- Setting up an LLP requires filing with the Secretary of State.
- You’ll should discuss the benefits and drawbacks of this structure with our expert LLP Business Formation Startup Attorneys before proceeding. For example, a Limited Partner can lose their protection in some types of work.
- Lastly. there are special considerations for Family Limited Partnerships.
- minimize your exposure to liability and offer the best protection of your assets because shareholders are distinct from the company;
- have tax benefits;
- are subject compliance rules; and
- finally, you lose substantial flexibility.
You definitely need help from our Corporation Business Formation Startup Attorneys. You’ll need a Certificate of Incorporation, Shareholders’ Agreements and more.
Setting up a business is an exciting time. But you need guidance from our experienced Business Attorneys to ensure your excitement doesn’t obscure some of the legal questions concerning a new business.
Contact our Business Law Attorneys for a consultation. You won’t find more proven and experienced Business Formation Startup Attorneys in Reading, Berks County or Pennsylvania. We’re also expert…
All are extremely important considerations with Business Startups.