Tampa Business Structures
Every business requires a different structure.
How to determine the best legal structure?
The appropriate legal structure for a business depends on the type of business you run, because there is no one choice suits every business.
Types of Legal Structures:
- Sole Proprietorship: this structure is the most common and easiest to set up because you do not have to file any special forms or pay any fees to start your business. Moreover, you do not have to follow any special operating rules. The draw back with this type of structure is that the business owner will be held personally liable for any problems.
- Partnership: this structure is generally an association of two or more people as owners of a business. There are many types of partnerships structures (general, limited, and anonymous partners) wherein each one gives the partners different levels of risk and control.
- Corporation: this is an entity created by the state that exists legally and it protects its owners from personal liability. It is more complex to establish than a partnership, but it is easier to transfer from one owner to another. Legally, this business structure requires Articles of Incorporation and Bylaws approved by the Internal Revenue Services (IRS). The most common reason to choose this business structure is because it offers protections that the others do not have and also for tax reasons.
- S Corporation: this offers the legal protection of a general corporation as well as the advantage of deducting losses in your personal tax return. This type of corporation was created especially for small business because it combines the legal advantages of a corporation together with fiscal advantages of a partnership.
- Limited LliabilityCompanies (LLC): are popular because they essentially combine the best of both worlds; the limited liability of a corporation and the favorable taxation accorded to partnerships. In essence this structure provides a limited liability to one or several of his members with transitional advantages. Its income and expenses are divided among its members. This structure is good for small businesses because it offers a simple way to carry out. But this option is not always the best, because if you want others to invest in the future of the business, a corporation would be a better choice.
In order for your business to have a better probability of success, remember to take the necessary time to evaluate what is the best business structure, since the idea is for it to start right according to your vision.
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