Business Start-Up and Formation

Our New Business Formation service provides everything you need to launch your business with confidence. From choosing the right structure to handling essential paperwork, we guide you through each step to set up a solid foundation for your new venture.

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Choosing the appropriate business entity is a crucial decision that impacts your company's taxes, liability, and operational flexibility. We offer comprehensive guidance to help you select the ideal structure for your business. Below, an overview of the most common business entities, each with distinct advantages and considerations.

A sole proprietorship is the simplest and most common form of business entity, where a single individual owns and operates the business. This structure gives the owner full control over business decisions and operations. However, it also means that the owner is personally liable for any debts or obligations the business incurs, making personal assets vulnerable. From a taxation standpoint, a sole proprietorship is a pass-through entity, meaning the business itself doesn't pay taxes. Instead, the owner reports the business's income or losses on their personal tax return using Schedule C. While easy and inexpensive to set up, this structure offers limited options for raising capital and has the drawback of exposing the owner to full financial responsibility.

A partnership involves two or more individuals who share ownership and responsibility for running the business. Partnerships are not taxedat the business level instead, the profits and losses pass through to the individual partners, who report them on their personal tax returns. This structure allows for shared decision-making and responsibilities. However, in general partnerships, all partners are personally liable for business debts and obligations, which can be a significant risk. For those seeking limited liability, a limited partnership (LP) or limited liability partnership (LLP) can be chosen, where some partners have limited liabilityprotection. Partnerships are relatively easy to form, but conflicts between partners and shared liability are potential challenges.

A Limited Liability Company (LLC) is a versatile business structure that combines the simplicity and tax benefits of a sole proprietorship with the liability protection of a corporation. In an LLC, the owners, known as "members," enjoy limited liability, meaning their personal assets are protected from business debts. For tax purposes, an LLCis a pass-through entity by default, meaning profits and losses are reported on the members' individual tax returns. However, LLCs also have the option to elect corporate tax treatment. While LLCs offer liability protection and fewer formalities than corporations, they can be subject to certain state-specific fees and paperwork.

A C-Corporation (C-Corp) is a legal entity separate from its owners, providing limited liability to shareholders, who are not personally responsible for thecompany's debts or legal obligations. This structure is often favored by larger businesses or those seeking to raise significant capital through the sale of stock. C-Corps are subject to double taxation the corporation itself pays taxes on its profits, and shareholders pay taxes again on any dividends received. The management of a C-Corp is divided between a board of directors, which oversees major decisions, and corporate officers, who handle daily operations. While C-Corps offer the advantage of growth potential and liability protection, the double taxation and the complexity of compliance make them less ideal for small businesses.

An S-Corporation (S-Corp) is a special type of corporation that allows income and losses to pass through to shareholders, avoiding the double taxation faced by C-Corps. Shareholders report their share of profits or losses on their individual tax returns. However, there are restrictions on who can be a shareholder there can be no more than 100 shareholders, and they must all be U.S. citizens or residents. The S-Corp offers limited liability protection, like a C-Corp, but it does not face corporate-level taxes.

A Limited Liability Partnership (LLP) combines the flexibility of a partnership with the liability protection of a corporation. In an LLP, each partner enjoys limited liability, meaning they are generally not personally responsible for the actions or debts of other partners. This structure is particularly common among professional service businesses such as law firms, accounting firms, and medical practices. Like a partnership, profits and losses are passed through to the partners, avoiding double taxation. However, the liability protection in an LLP is strongerthan in a general partnership, making it an appealing option for businesses seeking both flexibility and protection. While the LLP structure offers many benefits, it is subject to specific state laws, and not all types of businesses are eligible to form an LLP.

A nonprofit corporation is an entity formed to carry out charitable, educational, or other activities that serve the public good. Nonprofits are exempt from paying federal income taxes, provided they qualify under the IRS 501(c)(3) or other nonprofit statuses. Instead of having owners or shareholders, nonprofits are governed by a board of directors or trustees. These organizations rely on donations, grants, and volunteer support to fulfill their mission. Although nonprofit corporations benefit from tax-exempt status and eligibility for grants, they must comply with strict regulatory and reporting requirements. Nonprofits also have limitations on how their income can be distributed, as they cannot pay dividends or distribute profits to members or directors.

Choosing the right entity is a critical step in ensuring the success and growth of your business. Our team of experts provides personalized advice and support throughout the business formation process. We can guide you in selecting the optimal structure based on your specific needs and objectives, ensuring compliance requirements and laying the groundwork for your business’s long-term success. Let us help you navigate the complexities of business formation so you can focus on what truly matters growing your business with confidence.