Business Formation: Choosing a Business Entity
Setting up a business can be an exciting venture, and one of the first steps in this process will be to decide what type of business entity you want to form. Taking the time to consider what type of business entity is best suited to your needs and goals can be critical to minimizing future expenses and liabilities while also positioning your business for optimal success.
At the Law Offices of Darrell C. Harriman, our Santa Clarita and San Fernando Valley business formation attorney is well versed in the issues that need to be considered when it’s time to choose a business entity. While our lawyer can clearly explain people’s options regarding business entities, he can also help entrepreneurs get their new businesses up and running with minimal cost, stress and legal issues.Issues to Consider When Choosing a Business EntityWhen it comes time to choose the right business entity, here are just some of the things that should be taken into consideration:
Liability issues – When legal issues with businesses arise, the nature of the business entity can make the owners more or less personally liable. For instance, when a business owes some debts, the owner can be held personally liable for the entire amount of the debt owed if he is running a sole proprietorship or a general partnership. However, the personal liability of business owners can be reduced when businesses have been set up as LLCs or LLPs.
Federal tax issues – Depending on the business entity chosen, income from the business may be declared on owners’ personal income taxes, or it may be taxed at the business and personal level. While LLCs can help people minimize certain federal tax obligations (or even simplify them), strategic tax planning can also come into play for other types of business entities to offer more streamlined federal tax obligations.
State tax issues – While sole proprietorships and general partnerships typically do not have state tax obligations, LLCs, LLPs and certain other business entities will be responsible for paying state taxes, with the specific tax obligations depending on the specific nature of the business entity.
Based on the above (and other) considerations, any of the following options for business entities in California may be a more appropriate choice for your business venture:
- Limited liability corporation (LLC)
- Limited liability partnership (LLP)
- Limited partnership
- General partnership
- Sole proprietorship
Do you need help choosing a business entity or resolving other legal issues related to starting a business? If so, the trusted San Fernando Valley business attorney at the Law Offices of Darrell C. Harriman is here to help you. Since 1980, our San Fernando Valley business attorney has been dedicated to providing business owners with:
- Personalized, highly responsive service
- Superior representation
- The results and legal guidance necessary to bring all of their corporate legal issues to successful resolutions.
Let’s talk about your best options for business entities. You can contact our firm by calling (818) 892-7093 or by filling out the contact form on this page.
From our offices based in North Hills, we provide the highest quality legal services to our clients throughout the San Fernando Valley, Simi Valley, Santa Clarita and the greater Los Angeles area.