There are many reasons you may want to form a business. People oftentimes get excited about a new business venture, however, there are things to know first. Forming a business keeps business debts separated and can protect your personal assets in the event the business is sued. Our team of business lawyers can help you select the type of business entity that will both protect you from personal liability for your company’s debts and give you the best possible tax treatment.
There are several types of business organization formations:
- Sole proprietorship
- Limited liability company
As business attorneys, we also consider issues of ownership, and how new owners can be added or old owners be bought out as well as what happens if your partner dies, or gets divorced. Whatever your reason to begin a business, you need to know what type you want to create and how to form that business properly.
Each type of structure comes with its own set of rules, regulations, and benefits. The most common type of business organization is a Limited Liability Company (LLC). Its general purpose is to keep the owners’ assets separate from the business.
The steps to forming an LLC include:
- You will need to decide on a business name and make sure it is not being used by another company.
- Create a designating registered agent. A registered agent is a person or entity that receives official documents for the business.
- Your business will want to obtain and file Articles of Organization from your state. This action establishes your business as a legal entity.
- Make sure to create an Operating Agreement. While your state may not require it, it is a good idea to draft one. An operating agreement lays out the financial, legal, and management rights of all members of the LLC and includes information about how to distribute company profits.
You should consider hiring a business attorney who can walk you through the process above. A business is a legal entity, and you want to be sure you clearly and completely understand the implications and obligations in forming one.
If you believe you need to talk to an attorney regarding the setup of a business, business litigation, contract formation or litigation, or any other commercial or corporate law needs, contact our office at 330-922-4491 or through our contact page to schedule an initial consultation.