Many people start a business with little thought as to how the business should be organized. Many businesses are sole proprietorships and partnerships. While there are advantages to these types of business entities, they may expose the owners of the business to personal liability. Personal liability means that creditors can execute against personal assets of the sole proprietor or partners, including wages, family homes, cars and other assets. Incorporating a business or creating a limited liability company may better serve sole proprietors and members of a partnership. Our law firm can help. The laws governing business organizations are complicated. Be sure you have competent representation before you proceed.
The form of business chosen for a business entity potentially affects every aspect of its operation. Our firm assists our clients in formation and business planning in deciding whether they want to operate as a closely held business, limited liability company, partnership, or corporation. We advise our clients about reorganization, trade association membership and activity, joint ventures, mergers, acquisitions, business successions, and shareholders’ rights.
Limited Liability Companies (LLC) allow flexibility in deciding management issues and major business decisions, while protecting owners from personal risks, such as lawsuits, that arise from the operation of the business. LLC’s also provide for pass-through taxation, where taxes are paid by the individual instead of the business.
Corporations are more complex and exist in different forms, but still provide safeguards to personal risk. Other advantages include, ease of transferability, simplicity of capital raising, and perpetual duration. Some smaller companies choose to incorporate as an “S Corp” which allows pass-through taxation, similar to an LLC. Corporate management structure and major business decisions are governed by Articles of Incorporation, filed with the Ohio Secretary of State.
Our firm works with you to gain an understanding your businesses goals and needs, while providing you the legal safeguards to protect your personal assets from risks arising out of your business.