When you are beginning a business, one of your first decisions will be on a corporate form. This choice is a critical one, as your business entity will have its own pros and cons. You must navigate between ease and convenience and a structure that will give you more protection and tax breaks. In the end, you should invest the necessary time and money to start your business right.
Most businesses will choose some form of incorporation. Small businesses will often begin as limited liability corporations. This entity provides the members with both individual legal protection and many flexibilities. They can begin a business with less effort than other more complex forms.
A business can also become a C or S corporation. A C corporation is owned by shareholders and controlled by the board of directors. The advantage of a C corporation is that there are many tax breaks available. An S corporation allows for pass-through income tax treatment.
On the other end of the spectrum, a business owner can become a sole proprietor, although this form would not be advisable since the owner can be personally liable for debts, and the business would not look professional to banks and investors.
Owners can also elect for a partnership because it allows them to share in the profits and begin their business relatively easily. However, partnerships may have their own difficulties. Partners can be liable for the debts of the business and the actions of other partners. You should consider whether it makes sense to form a limited partnership for more protection.
Contact a Miami Business Attorney Today
Attorney Daniel D Diaz works with small businesses during the startup phase and can help you make key decisions. To speak with an attorney, send us a message online or call us today at 786.256.3299.
