South Carolina Business Formation
Business Formation is known as the legal format or structure that you want your new business to operate under. Although it is not permanent, this is an important decision to make as it will determine how you will go about your financing, how you’re going to pay your taxes, who will be the key players in your company, etc.
Fraser Law Firm, LLC, a respected name in Real Estate Law and Hilton Head, SC Business Formation Attorney, can help you in making an informed choice as to which business structure would work best for your situation.
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The 5 Main Business Structures
In this section, we will briefly discuss the 5 different business structures from which you can choose.
Sole Proprietorship
This is the simplest type of business structure that is run by one person for his or her gain. They do not exist apart from the owners and are terminated upon the proprietor’s death. The proprietor personally undertakes the risks, liabilities, and assets.
A sole proprietorship is not a separate legal entity from its owner, but its financial activities are separate from that of the owner’s financial activities for accounting purposes.
Partnerships
A business partnership binds two or more individuals legally to carry on a business. The people involved are expected to invest money in the business, as well as their property, labor, or skill. They likewise share in the profits and losses of the business.
Partnerships are classified into two: general partnership and limited partnership. A general partnership is when all partners contribute to the day-to-day management of the business. A limited partnership, on the other hand, allows “silent partners” who only invest in the business but do not involve themselves in running the business.
Corporation
A corporation is considered the most advantageous way to start a business because it exists as a separate entity from its shareholders. It is liable for the finances and actions of the company while the shareholders are not.
There are two main types of corporations: C-Corporations and S-Corporations. A C-Corporation’s income is taxed through the corporation rather than its shareholders, while an S-Corporation’s income is taxed through its shareholders.
Limited Liability Company (LLC)
An LLC is a business entity that functions as a hybrid between a partnership and a corporation. The owners, as in corporations, are not personally liable for the debts or liabilities of the company. Likewise, they have operational flexibility and profit benefits that are the same as in a partnership.
The regulations surrounding LLCs differ from one state to another. It is recommended that you consult your attorney to come up with the most suitable business structure for your business.
Trusted Business Attorney in Hilton Head, SC
Business Formation is one area in your business where it is best to seek the help of a trained and experienced lawyer. Allow us to help you get a solid business structure in place so that you can provide your organization with the best possible chance of success.
Denny Fraser of Fraser Law Firm, LLC is a trusted Business Formation Attorney and author with offices in Hilton Head and Okatie, SC. Business Lawyer in Lowcountry.
Aside from business formation, Mr. Fraser also gives his clients legal assistance on real estate transactions, construction law, estate planning, employment law, credit relations law, property owner’s association law, and general litigation.