Business Formation Business Law in Spartanburg, SC
Starting a business is a dream for so many people, and it is an incredibly exciting time. However, forming a business is also time-consuming and many obstacles may arise along the way. There are many legal issues someone will face when starting a business and while business owners are experts in their chosen industry, few are well-versed in the legalities involved.
Some business owners may worry about making a legal misstep, while others may not even consider the possibility. A Spartanburg business formation lawyer can help ensure these mistakes do not happen, and help owners form their business in a manner that is most optimal for them.
Considerations When Forming a Business Entity
Many businesses start small with just one owner and it is not uncommon for these business owners to assume they have to create a sole proprietorship. They are then surprised to learn that this is not always the best option. Forming a corporation or LLC can offer many benefits that sole proprietorships do not.
Corporations and LLCs are treated as individuals in the eyes of the law. These businesses can own assets, sign contracts, and even take legal action when they need to file a lawsuit or defend themselves against one. This is an important distinction. When an LLC has a lawsuit filed against them, only the company is liable if the result is unfavorable. When a sole proprietor is sued, on the other hand, they can be held personally liable, which can place their own assets, such as their home, at risk.
What is Involved when Choosing a Business Entity?
Just as it is critical that business owners know the type of entity they want to form, it is just as important that business owners know what is involved in forming a specific type of entity.
Forming an LLC is often quite simple, but the process still has the potential to become complex quite quickly, particularly if the business has unique or intricate needs. Creating an LLC also involves some paperwork including the articles of organization, an operating agreement, and an EIN. A business formation lawyer can advise on the types of documents a business owner will need, and assist them with drafting and completion of these documents.
Forming a corporation is more time-consuming than forming an LLC, and there is much more documentation that is required. Still, corporations hold many benefits over LLCs for many business owners. For example, an LLC’s profits and losses must be reported on the owner’s personal tax return, while corporations pay taxes at the business level.
Without a full understanding of what is involved when forming a business, it becomes much more difficult for business owners to determine which type of entity is right for them. A Spartanburg business formation lawyer can help any business make an appropriate decision.
Talk to Our Business Formation Lawyers Before Forming Your Business
At A Business Law Firm, our Spartanburg business formation lawyers understand that the very first steps you take as a business owner will greatly impact your company. We want to help you make an informed decision that will benefit you and your business now, and in the future. Call us today to schedule a consultation and to learn more about how we can help when forming your business.