Determining Which Small or Large Business Structure is Right for You Small or Large Business Structure Finding the right Small or Large Business structure can be very important to your success. A decision of this nature is best made with an attorney, who can help you choose the structure best for you. Additional factors to take into consideration include tax, liability, management, continuity, transferability of ownership interests, and formality of operation, to name a few. Here are several forms of Small or Large Business organizational structures to consider. Sole proprietorship: This is the simplest and most common form of business. A formal organizational structure is not necessary, as a single individual handles a sole proprietorship. The business is given an assumed name, a name other than the surname of the individual, and the appropriate certificates should be filed in the county where a business premise is maintained. If business is conducted across several counties, then it is important to maintain a certificate in each location. General partnership: A general partnership exists between two individuals creating a business together. A written agreement between partners is not mandatory and therefor may be verbal. However, a general partnership falls under the same regulations as a sole proprietorship with regards to certificate filings. Corporation: If developing a corporation, a legal person assumes the aspects of limited liability, centralization of management, perpetual duration, and ease of transferability of ownership interests. Shareholders and directors are part of this type of structure. Shareholders are the owners of a corporation, while directors are those who manage the business of a corporation. If decided by a shareholders’ agreement, the position of directors may be abolished and maintained by the shareholders themselves. Additionally, corporations can fall into two categories, “S” corporations and “C” corporations. These decisions should not be taken lightly and should be made with the help of an experienced attorney. Like the remaining business structures we will discuss, corporations file certificates of formation usually with the Secretary of State for their particular location. Limited Liability Company: A limited liability company, otherwise known as an LLC, is structured in a manner that gives properties of both a corporation and a partnership. It is up to the owners to determine the structure, so it may be more of a general partnership with limited liability, a limited partnership where everyone is part of management with limited liability as well, or even an “S” corporation without the ownership and tax restrictions mandated by the Internal Revenue Service. The owners of an LLC are called “members” and can manage the LLC themselves or with managers. Each entity’s liability is limited to their investment in the LLC, but the tax and other benefits are shared by all. Limited Partnership: A limited partnership is formed by two or more individuals and has one or more general partners and one or more limited partners. A partnership agreement, whether written or oral, is the basis for operation and conduct of business. This agreement does not need to be filed with the state, only a certificate of formation. Limited Liability Partnership: A general or limited partnership may decide to register as a limited liability partnership. This is beneficial in order to limit the liability of its general partners. While there are many options for a Small or Large Business structure, a knowledgeable attorney can help you decide which is best. Such an endeavor should not be taken lightly.

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