Before you form a business, you will need to select the structure. The type of business entity you select will determine many things about your company, including:
- How it is run
- The relationship between the owners
- Your tax status
- Your potential liability
Some people may begin their business as a sole proprietorship because it is easy. An attorney would caution against choosing this business form because you have potentially unlimited liability and cannot use many tax breaks that benefit businesses.
Most commonly, business owners will choose to incorporate their company. Within this business form, there are several categories. Oftentimes, business owners will choose to form a limited liability company (LLC). In an LLC, you not only get protection from liability, but you will also be able to take advantage of many tax breaks.
Others may elect from a C or S corporation. A C corporation is owned by the shareholders and has a board of directors. In addition to protection from liability, C corporations also receive the most tax breaks. In an S corporation, the owners are able to pass through their income to their tax returns and receive protection from double taxation.
Some business owners may elect to form a partnership, so the owners can share in the profits and losses. Unless one elects for a limited partnership, they may end up liable for the partnership’s debts and personally bound by the actions of the other partners. In addition, the type of partnership could also determine whether the entity must dissolve when one partner leaves or dies.
Contact an Atlanta Business Attorney Today
Battleson Law LLC can advise you on which corporate form works best for you, and we can help you execute the necessary documents. To discuss your needs, you can send us a message online or call us today at 470.766.0811.