Whether you decide to choose to become a sole trader, a corporation, partnership, or even a limited liability company, there are multiple legal factors that every business owner must analyze effectively before proceeding. Establishing a proper form is meant to alert the entrepreneur on the legal issues that he/she should be aware of before making any decisions regarding the formation. Consulting an attorney before taking any action is essential to make sure any permanent or significant mistakes are avoided.
First and foremost, the most important decision that every entrepreneur must make is to understand the right Orlando Corporate Structure. The structure of the business would be based on the number and type of owners, the liability they may have to face, the simplicity and tax planning.
The following areas are certain issues that every startup business owner needs to address before deciding on the suitable Orlando Corporate Structure for the business:
- Are you likely to be sued?
- Is pass-through taxation right for your company?
- Are you looking at outside investments to your company?
- Who takes care of corporate governance issues?
Are you likely to be sued?
Many smaller businesses or startup companies aren’t able to generate a significant amount of revenue or get involved in business transactions that may subject them to liabilities. If your company is this type of business, you may have to opt for the more lenient option of a sole proprietorship (sole trader).
However, it is essential to keep in mind the liabilities that may arise from unexpected places. Considering whether you have a legally binding relationship with a marketing partner or other investors, could help determine the chances that you may have to be sued under one of these agreements. In a sole trader business or general partnership, the entrepreneur/s may not be protected from personal liabilities or other liabilities from their business. In an LLC company, however, the entrepreneur/s may have a higher chance of being protected from these liabilities.
Is pass-taxation right for your company?
Pass-through taxation allows the owners, partners, and other members of certain business forms to report profits and losses on their personal tax returns. So what makes it so great? Pass-taxation may eliminate double taxation on your entities. Another useful feature that pass-through taxation may have is that, in certain instances, you can deduct business losses.
Are you looking at outside investments to your company?
If your company is looking to actively market your products and lacks the resources to do so, outside investments may be necessary. Although venture capitalists and angel investors may provide small companies with the necessary funds they may need to grow, not every Orlando Corporate Structure is suitable for outside investments. If you are considering outside investments, you should contemplate a more flexible entity like a corporation.
Who takes care of corporate governance issues?
The final issue that you need to consider is the managerial and structural organization of your company. While nearly all business structures can be molded to accomplish goals, some forms of Orlando Corporate Structure provide better initial flexibility.
Trying to determine all the factors in establishing a proper Orlando Corporate Structure can be challenging to do alone, that’s where The Gretchen Ortiz Law Firm comes in. Gretchen Ortiz Law Firm assist business owners in many areas of legal issues that arise during business management. At the Gretchen Ortiz firm, we combine experience, commitment, and skill to help clients with the entire proceeding of establishing their businesses.
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