Why you should talk to a business formation attorney to start your new business
In the Internet age, instant gratification has become an imperative for just about anything that involves words or numbers. This presents a unique challenge for entrepreneurs, who as a result might develop an unrealistic vision for their success and an impossible schedule to go with it. This is the primary reason an attorney who specializes in business and business entities is so vitally important. Here are some things to consider if you are planning to start or grow a new business.
What is a Business Entity?
For many new companies, an entity is simply a structure within which they can do business in an orderly manner. Whether it is a corporation, a limited liability company or partnership, entities create a company which may have its own property, contracts and identity. This is very different from a sole proprietorship or a doing-business-as (DBA) structure. Aside from the name, a sole proprietor working under a DBA is a person rather than a company for legal purposes.
Why Start a Company?
The Limited Liability Company (LLC) and corporation entity types give their shareholders and management something called a “liability shield.” This is because legally speaking, a corporation or an LLC is a separate “person” with its own legal identity. An LLC or a corporation can sue or be sued, and any judgments obtained will only be enforceable against the business entity itself. Such a judgment cannot be executed against the shareholders or management.
Corporations and LLCs can also occasionally give their owners certain tax advantages, as company income may be subject to different tax rates and may also be able to trigger all kinds of deductions unavailable to an individual.
How are Business Entities Formed?
If you are planning to start a company, forming your entity is where you are likeliest to obtain the full benefit of a business attorney. They will be able to explain the various details of entity types, how ownership can be distributed, and what your ongoing obligations will be with regard to taxes, filing your paperwork with local, state and federal government offices and how your contracts will need to be structured if you plan to do business with other companies or the general public.
While it is possible to form a company on your own, and also possible to find numerous companies that will try to persuade you it’s as easy as writing a check, the reality is you need to know the full range of options so you can make the right decisions. These options can change dramatically from state to state. You will be grateful in the long run if you recruit a competent attorney to guide you through the details. At Grand Law Firm, we can help you set your business up right. Schedule your free consultation today. We can walk you through the process from start to finish.