Post by account_disabled on Nov 26, 2023 10:50:51 GMT
There are many available solutions. Good examples are the forms available in the United States, although they also appear in other countries, but under different names. Which legal structure works best for a startup? Read our article and find out.
Which legal structure is best for your business? – table Industry Email List of contents:
Sole proprietorship
Limited liability company (LLC)
Partnership
C corporation (C-corp)
Which legal structure works best for a startup?
Sole proprietorship
Startup founders face many difficult decisions, and choosing the proper legal structure for the company is one of the most important ones. There are various options available and each has its pros and cons. The simplest solution is to set up a sole proprietorship as it does not involve complicated procedures, and such a business has no legal personality.
In this case, for the tax authorities, the owner and the company are one. You do not need to register such a business as far as the USA is concerned. It is enough to start a business activity and pay taxes. However, if you need to get a permit or a license, go to the right office. If you want to reserve a company name, apply for a DBA certificate.
Limited liability company (LLC)
Another popular legal structure for startups is the LLC or limited liability company. Why is it so advantageous in the United States? First of all, the costs of launching such a company are low, and the company’s results are included in the personal annual tax return.
What is important, however, is that the company’s shareholders are not personally liable for the startup’s debts and legal obligations. In this case, the company exists as a separate entity, not directly connected to the founder’s assets. This legal structure will make your business more credible.
Partnership
A very popular choice for a startup is a partnership structure. Such an organization can be owned by at least two people. There are two options: general partnership or limited partnership. The first is the cheapest and easiest to set up. In this case, responsibilities are shared among all partners equally.
Which legal structure is best for your business? – table Industry Email List of contents:
Sole proprietorship
Limited liability company (LLC)
Partnership
C corporation (C-corp)
Which legal structure works best for a startup?
Sole proprietorship
Startup founders face many difficult decisions, and choosing the proper legal structure for the company is one of the most important ones. There are various options available and each has its pros and cons. The simplest solution is to set up a sole proprietorship as it does not involve complicated procedures, and such a business has no legal personality.
In this case, for the tax authorities, the owner and the company are one. You do not need to register such a business as far as the USA is concerned. It is enough to start a business activity and pay taxes. However, if you need to get a permit or a license, go to the right office. If you want to reserve a company name, apply for a DBA certificate.
Limited liability company (LLC)
Another popular legal structure for startups is the LLC or limited liability company. Why is it so advantageous in the United States? First of all, the costs of launching such a company are low, and the company’s results are included in the personal annual tax return.
What is important, however, is that the company’s shareholders are not personally liable for the startup’s debts and legal obligations. In this case, the company exists as a separate entity, not directly connected to the founder’s assets. This legal structure will make your business more credible.
Partnership
A very popular choice for a startup is a partnership structure. Such an organization can be owned by at least two people. There are two options: general partnership or limited partnership. The first is the cheapest and easiest to set up. In this case, responsibilities are shared among all partners equally.