Many people want to own and operate their own business. The idea of not having to work for someone else, and controlling what you do, as well as how and when you do it, are very appealing. When starting a business, there are several decisions that you will need to make. One such decision is the type of entity to use for your business. You can set up your business as a sole proprietorship, limited or general partnership, corporation, or limited liability company (LLC).
SOLE PROPRIETORSHIP
A sole proprietorship is the simplest business entity. If you have a sole proprietorship, then there is only one owner. This is the most common type of entity selected by businesses because it is the most economical to start. However, with this kind of entity, it is important to know that there is no distinction between you and your business. This means that your personal assets are liable to creditors in the event your business has financial problems.
PARTNERSHIP
A partnership is generally a type of entity where there are two or more individuals who operate the business together. Although this type of business is relatively simple to establish, partnerships have their own set of tax and liability issues. With this type of business, there are also shared responsibilities. This may be both good and bad. If one partner doesn’t do something well, it can have an impact on the other partner as well and upon the company as a whole.
CORPORATION
A corporation is another and often a flexible type of business organization. Corporations are state-chartered and have specifically associated legal rights. One benefit of a corporation is that the owners have limited liability because the corporation is deemed to be a distinct legal entity, separate and apart from its owners.
LIMITED LIABILITY COMPANY (LLC)
A limited liability company has a lot of the same benefits available to a corporation. LLC’s may also be owned by a variety of entities such as individuals, estates, trusts, other LLC’s, and even corporations. It is also possible to have an LLC taxed like a partnership.
Deciding which type of business to utilize may have long term legal consequences and benefits. At Simon Law, your Las Vegas business and real estate attorneys, we can help you with this decision. Call us today to get started.
