One of the most important steps to take during the formation of a new or growing business is choosing a legal structure. A business legal structure refers to how a business is legally organized. The type of legal structure you choose for your business will affect how your business is regulated, taxed, and more. To guide you through the process, our Fort Lauderdale business law attorneys explain what you should consider when choosing a legal structure for your business.
Choosing a Business Legal Structure
The first step to choosing the right legal structure for your business starts with analyzing your company’s goals along with state and federal laws. The legal structure you choose should fit your company’s culture. Below we list the most popular forms of legal structure:
- Sole proprietorship: This is the most simple type of business structure. A sole proprietorship is for single business owners who want to share their entity and liability with their business. What this means is that your personal debt can affect your business’s success. This type of structure may not be the best fit for business owners who don’t want their business or personal debt to co-exist.
- Partnerships: This entity is only for companies with two or more partners. With a partnership, you can share profits and losses, and make decisions together within the business structure.
- Limited liability company (LLC): This is another common type of business structure that allows owners, partners, and shareholders to limit their personal liabilities while enjoying flexibility in tax benefits.
- Corporation: A corporation is viewed as an entity separate from its owners. It has its own legal rights, independent of its owners. What this means is that a corporation can sue, be sued, own and sell property, and has the right to own stocks.
Choosing the right legal structure for a business can be challenging. Get in touch with us today at (954) 874-8870 to schedule a consultation!