There’s risk in starting any small business, so before you get started, you’ll want to decide what form of a business entity you’ll be forming. If you merely want a sole proprietorship or a partnership, you can get started with your business tomorrow, but neither of those entities are recommended. With a sole proprietorship or partnership, you’re placing your personal assets at risk along with your business assets. Here’s how the Barbur Law Office in Milwaukie Oregon helps owners of small business start – ups protect their personal assets.
Most small business start – ups are corporations. The most attractive feature of a corporation is that it protects the personal assets of its owners from corporate debts. That’s because in the eyes of the law, a corporation exists entirely separate and apart from the people operating it. Corporations have other advantages too. A corporation can last forever unless it’s dissolved, merges with another corporation or goes bankrupt. Ownership interests in corporations are shares, and they can easily be bought, sold or otherwise transferred. Formation of a subchapter S corporation might also avoid double taxation.
The limited liability company
There’s no personal liability for members of a limited liability company (LLC) either. The LLC is a mix between a corporation and a partnership or sole proprietorship. Double taxation might also be avoided with a LLC. Unlike a corporation though, a LLC must be dissolved upon the death or bankruptcy of a member of the LLC. A business continuation agreement is required when a member of the LLC leaves or dies. Without that business continuation agreement, the LLC must be dissolved.
If you’re going into business for yourself, there’s no reason not to form a corporation or limited liability company. So long as you don’t commingle your personal assets with the corporate or LLC assets, you’re personally protected, and there’s no exposure on double taxation. Come visit us with your questions at the Barbur Law Office in Milwaukie Oregon, and we can go over business formation with you in more detail. Your success is our success too, so we want to see you do well.