What Business Type Is Right for You?
Be sure you establish your business in a way that leverages benefits and fits your needs.
When setting up a new business, the prime initial question is whether to establish a limited liability company, a corporation, a general partnership, or a sole proprietorship. The answer in significant part depends on how you want to deal with the risks of potential personal liability. This consideration is also of concern in evaluating any present entity.
Corporations
With a C-corporation, the owners become stockholders, and they have very limited personal liability, unless they fail to properly operate the business as an actual corporation.
Limited Liability Companies
If you register the entity as an LLC and comply with other filing and legal requirements, the members (owners) also have limited liability, and their personal assets are generally shielded from the debts of the business.
Sole Proprietorships
The major drawback to a sole proprietorship is that the single owner’s personal assets are not shielded from the debts of the business.
General Partnerships
If there are two or more owners, the business can be set up as a general partnership. However, the general partners are personally liable for the debts of the business.
In addition to the liability issues, it is also important that you consider the tax implications of utilizing one of these options to structure the new business entity.
If you have questions about the formation of a new business entity, contact attorney Matthew P. Gerdisch at 414-962-5110 or via email at mgerdisch@kmksc.com.
About KMK
Kohner, Mann & Kailas, S.C. (KMK) is a value-driven law firm with a global reputation for success and a rich tradition of results. When you need unsurpassed legal expertise in business and financial services, business litigation, or commercial collections, let our seasoned attorneys help you achieve your most important objectives. Founded in Milwaukee in 1937, KMK enjoys a local, national, and international reputation, recognized by U.S. News & World Report as one of the nation’s Best Law Firms. For more information, visit www.kmksc.com