Starting and growing a business can be very stressful and time consuming, but the overall experience should be very rewarding. You can give your business the best start possible by choosing the most appropriate business structure for your business. What structure is best for you can be a complex question based upon several factors including tax consequences, liability and personal circumstances. Even if your business has been operational for some time, the structure may need to be altered due to changed circumstances. Some basic information about some common business structures is included below. At Avery Law Office, we will discuss the advantages and disadvantages of the various structures, help you determine the most appropriate structure and set up your business.
The sole proprietorship is the one of simplest forms of business organization. This structure occurs as a matter of law and you do not need to see a lawyer in order to create a sole proprietorship. When you start to carry on business on your own, you operate as a sole proprietor until some other form of business organization is adopted.
A general partnership requires two or more persons working together to carry on business with a view to profit. This structure occurs as a matter of law. You do not need to see a lawyer to create a partnership, but it recommended that you seek legal advice. Many important aspects of the relationship between partners is not dealt with in law and should be addressed in a partnership agreement. Examples of matters to be covered in a partnership agreement include the initial and ongoing capital contributions of partners, the
manner in which partner distributions are to made and the admission of new partners.
In addition to general partnerships, limited partnerships and limited liability partnerships can also be created. These types of partnerships provide creative business structuring options. Both result in reduced partner liability and the former is a tool for investors who do not want to become involved in running the business. Contact us to find out more details about these forms of business organization and whether they may be appropriate for your business.
A corporation is a more complex form of business organization and can be expensive to set up and maintain. It must be created in order to come into existence. You should seek legal assistance when creating a corporation. The creation of a corporation requires the preparation of several documents, including an application, incorporation agreement, notice of articles and articles. The articles set the rules for the conduct of the corporation and its authorized share structure. These documents must be carefully drafted and made in accordance with law. The issues to be covered in these documents are too broad to be addressed in this brochure. Legal advice and guidance is recommended.
Once formed, a corporation has a legal identi-ty separate from its shareholders and direc-tors. A corporation, as a legal individual, can commence a law suit in its own name, purchase property and contract with its shareholders.
The information provided on this website is merely an informative guide and should not be relied upon for legal advice. It is intended to provide general information only. It is recommended that you see a lawyer about your particular legal situation and request legal advice.