Business Formation
Business formation infrastructure is to make sure that your business is set up correctly so that you have a solid foundation to build upon.
The type of container you have for your business is very important. Choosing the type of container should be a well-reasoned analysis of the best fit for your particular situation. After it is set up, there are ongoing requirements and responsibilities for maintaining a healthy business structure. Every container has its own rules, so you need to be sure you know them and follow them for successful business formation.
Frequently Asked Questions
Which types of business structures are there?
There are four basic business structures to choose from. Keep in mind that there are legal rules and there are tax rules. You may hear terminology that that confuses the two, but consider them separately. Below are the most common forms of business containers and their corresponding tax treatments.
- Corporation – Can be taxed as a C corporation or an S corporation
- LLC – Can be taxed as a C or S corporation, a partnership or a sole proprietor
- Partnership – Taxed as a Partnership
- Sole Proprietor – Taxed as a Sole Proprietor
Which types of business structures provide liability protections for its owners?
The type of structure you have will dictate the requirements to form it, but most business structures will require some state filings and some IRS filings. Some structures will require that you have internal documents in place that don’t actually get filed anywhere – you just have to have them.
Is there anything I have to do on a regular basis for my business?
Depending on the type of structure, you may have yearly filings and required meetings. The state of Florida may require you to file annual reports and the IRS may require that you file a tax return for your business. There are also internal documents that you may need to have each year, but don’t actually file anywhere.
How do I know what type of business structure is right for my business?
There are so many factors to consider when choosing a business entity, that no one answer will be right for everyone. We often have people say they want an LLC because it’s the simplest to form. This is a common misconception. An LLC is actually one of the most complex and sophisticated business structures available. It is appropriate only in certain circumstances. You should consult with an experienced business attorney for help in determining the appropriate structure for your business.
Focus on these specific areas in your business to build stronger legal infrastructure:
Entity Structure
The type, organization, structure, and governance of your business is the most basic aspect of your foundation.
Regulatory Compliance
Many service professionals are governed by specialized rules and regulations in addition to general regulations.
Client Relationships
Having direct, honest relationships with your clients is the key to repeat business, referrals, and long-term success.
Vendor Relationships
When you’re the client, understanding the agreement and how the relationship should work is critical.
Worker Relationships
Relationships with an employee or independent contractor need to be defined to protect your business and clients.
Owner Relationships
Without structure or guidelines to establish expectations and accountability, business partners can pose a high risk.
Trademarks
An important part of protecting your brand is making sure your trademark rights are in place.
Copyrights
Copyrights capture a broad range of things you create for your business or for your clients.
Check out our journal posts below for more information on this topic:
Here’s what clients who came to us to form their business are saying:
“Having never owned a business before, Laurie and team saved me time, effort and probably lots of future money in helping me understand processes, helping me negotiate specific items and giving me valuable “heads up” notices on things I hadn’t thought about. The advice was priceless to me.”
“When my siblings and I were looking to start our own small business, we knew enough to know we needed professional help. The Legal Department ending up being everything we didn’t know we needed. The team patiently answered our questions and tailored a business partnership that perfectly met our needs.”
“I highly recommend Laurie Lee and The Legal Department. Laurie assisted with me with some aspects of starting a new business venture. She and her team were very attentive and took the time to listen to my business goals and worked with me to develop a plan to achieve what I needed.”
