Sole proprietorship remains one of the most common business forms. However, it puts little between your personal assets and any business liability. You risk your business missteps comprising your family wealth and long-term stability.
Andrew Hoffman Law can help you consider a different approach. Changing your sole proprietorship into a business entity means tax advantages, liability protection, and management benefits. It also gives your business more room to expand. As lawyers operating in a small community, and descendants of small business owners, we can relate to your concerns and find the best way to protect your hard-earned success.
Limited Liability Companies
Also known as an ‘LLC’, a limited liability company offers the protection of a corporation with the flexibility of a sole proprietorship or partnership. Going through its formalities means better shielding if a business liability arises and tax benefits. Yet, it can offer a loose management system that will not seriously disrupt your current operations.
Corporations are independent entities. Depending on the size of your business, you can elect to become a ‘C’ or ‘S’ corporation.
Small business will likely consider the ‘S’ corporation. This special form avoids the double-taxation associated with the ‘C’ form. However, it maintains its independence as a separate entity, which means protection for you as the business owner.
‘C’ corporations are recommended for larger companies with more employees. They are taxed separately and maintain their own liabilities. As a shareholder in a ‘C’ corporation, you are not liable for the debts or any causes of action that may be filed against the company. ‘C’ corporations also have the option of ‘going public’ by allowing outside parties to buy its stock and increase assets for capital investment.
All business forms have their advantages and disadvantages, depending on your industry, assets, and goals for the future. For that reason, Andrew Hoffman Law works as a team with you, your accountant, insurance agent, and other professionals to determine the benefits of forming an entity and draft a plan for the future. To start this process, contact us for a consultation in our Atkinson, O’Neill or Central City office.