If you’re starting a business, your first step is to determine which legal structure is best. Your company may be formed into one of five business entity types:
- Sole proprietorships
- General partnerships
- Limited partnerships
- Limited liability companies
Creating your actual legal business entity can be a simple process, but knowing which structure is best for your business circumstances is a different matter altogether. Each business entity brings with it different tax and governance implications. Prior to determining the best structure for your business, you and your small business attorney will consider the following key factors:
Tax benefits: The structure of your business should maximize tax benefits for your company
Voting power: The authority to make business decisions can be affected by your business structure.
Profits and cash: Your options regarding what you do with business processes and cash assets can be limited by your business structure.
Principal activities: Your structure can help determine how principals interact with each other and the business.
When you create your business, you’ll want to ensure that you’re selecting a business structure that provides you with maximum benefits now and in years to come.
Additionally, forming a small business also requires myriad documents and contracts like stockholder agreements, operating agreements and articles of incorporation. Your small business attorney is experienced in preparing and executing these documents to ensure that your business structure is sound and your organization is poised for growth and profitability.
Capitalizing on your new business venture can be a difficult task. Your small business attorney can assist you by advising you on how best to capitalize using owner equity investments, bank and private debt financing and venture capital transactions.
If you’re starting a business, it’s important to have the right players on your team. Your small business attorney is an essential part of this team – your business relies on that expertise.