It is quite exciting to start a new business, but there is also a lot of careful planning and preparation that needs to go into it. Securing financing, evaluating the marketplace, determining your customer segment, designing a logo, and determining where you will sell your products and services are only a few of the numerous things that you need to do. It is also crucial to determine the structure of your company. When you are starting a business, you need to know about selecting the entity that is appropriate for you. For this, it is best to work with a reputable business law firm in Santa Rosa, and make sure that your company is off to a great start.
Types of Business Entities
Here are the things you need to know when deciding on a business entity:
1. Sole Proprietorship: Because it is one of the simplest types of business structure, you will not even have to go through the process of filing for a separate tax identification number. This is due to the fact that you will have to include the income you make from your business on your tax returns. However, you should also bear in mind that with sole proprietorship, you will also be liable for all the business debts.
2. Partnership: In this type of business entity, you form a business with one or more parties. All the partners have a share in the company’s profits and losses, but it does not always have to be equally split. As with a sole proprietorship, the partners in this type of business structure are personally liable for any debts or any other liabilities encountered by the company.
3. Corporation: Corporations are the most complex of all business entities, and the partners that form a corporation are not liable for any debts of the business. This type of entity is taxed on the profits of the company as well as the dividends of the shareholders. Since they are a more complex structure, corporations are required to adhere to more government oversight.
4. Limited Liability Company (LLC): LLCs offer some of the benefits of both a corporation and a partnership. They are not double-taxed like corporations, but still protect you from personal liability for the business.
Start Your Business with the Top Business Law Firm in Santa Rosa
If you are planning to start a business, make sure that you decide on the right business entity with the best business law firm in Santa Rosa – Johnston Thomas Law Firm. We will help you start your company the right way and ensure its success. Call us today at 707-545-6542.