When launching a business, one of the first decisions you will face is determining the best business structure for you. Your business structure will have significant financial, operational, and legal implications. Below are the most common types of business structures:
- Sole Proprietorship: Sole proprietorship is a structure owned and operated by one individual, and the owner is solely responsible for all financial obligations and profits. While it is easy to set up and manage, the downside is that the owner's personal assets are at risk if the business encounters any financial or legal troubles.
- Partnership: A partnership is where two or more people share the ownership of a single business. Profits, losses, and management duties are divided among the partners, who are personally liable for the business's obligations. Partnerships can be general or limited, depending on each partner's level of liability and involvement. In general partnerships, partners share roles in operating and owning the business. On the other hand, a limited partnership has both limited and general partners. Limited partners are typically investors who have limited input or control into the business, but whose assets are generally limited to their capital contributions.
- Limited Liability Corporation (LLC): An LLC is a more flexible business structure combining elements of both partnerships and corporations. Establishing an LLC requires filing an organizational document, and its owners are typically known as members rather than partners or shareholders. Members are not personally liable for company debts.
- Corporation: A corporation is a complex business structure considered a separate legal entity from its owners. This means the corporation is legally liable for the actions and debts the business incurs. Corporations provide vital protection for owners' personal assets. A corporation can issue various classes of shares, meaning different decision-making and ownership structures exist.
Contact The Bloom Group, LLC Today to Speak with a Washington DC, Business Attorney
Understanding various business structures can differentiate your business's success and failure. Whether you want to establish a sole proprietorship, LLC, or a corporation, The Bloom Group, LLC can help.
The Bloom Group, LLC, will support you through these complex decisions, ensuring that your business is set up for success. Contact Washington, DC, business attorney Peter Bloom today to discuss the best structure for your business.
