Businesses can be organized in several types of legal forms. Keleti+Moradian LLP can help with the selection of the proper entity type, thoroughly explaining the benefits and obligations of each kind of organization, as well as completing the legal formalities in establishing and maintaining a healthy business entity.
- Sole Proprietorships An individual may own and operate a business. If using anything but his or her own name, however, the individual must follow certain legal formalities to use a fictitious business name.
- Partnerships Two or more individuals may form a general partnership, sharing profits, losses, and responsibilities. Partners have unlimited liability for the partnership’s debts and other obligations. Making clear how the partners deal with each other, including such matters as the division of profits and what happens when the partnership ends, is best addressed with a written partnership agreement.
- Nonprofit is a corporation that is exempt from most state and federal taxes (some localities still levy taxes or fees), may be eligible for grants and public funds. A nonprofit serves a particular niche or group that is guided by proper legal and organizational documents.
- Corporations A corporation is legal entity owned by its shareholders, who may or may not be involved in the running of the business. The owners of shares in a corporation share in the profits of a corporation in proportion to the amount of stock they own. Shareholders are not liable for the obligations of the corporation beyond their investment in the business.
- Limited Liability Companies (LLCs) LLCs are similar to partnerships, but the owners of LLCs (called “members”) are similar to a corporation’s shareholders, that is, they have limited liability. LLCS must have detailed operating agreements and structures.
- Limited Liability Partnerships (LLP) For some professional endeavors, such as accountants and medical groups, the owners may not form an LLC, but instead a limited liability partnership, which is a hybrid of a general partnership and a limited liability company.