If you are an aspiring small business owner, know that engaging in small business planning now can help to ensure that your new company thrives once it becomes operational. This process can also help to ensure that your personal risk of liability tied to your company’s success or failure is mitigated if that is a concern for you.
Few small businesses choose to be structured as corporations because there are few benefits associated with this approach, provided that the company’s owners intend to keep their business interests relatively “small.” Corporations are run by a board of directors and are technically owned by shareholders. If this model interests you, the savvy team at Kerkman & Dunn can certainly walk you through the ins and outs of this opportunity. Otherwise, there are going to be three primary formation options for you to choose from.
Sole Proprietorship
If you are going to be the sole owner of your enterprise and you plan to serve clients or customers in particularly personalized ways, a sole proprietorship may be all you need at first. This business structure requires virtually no start-up paperwork or administrative costs. It provides a self-enterprising owner with maximum control over their operations and is easily taxed on the owner’s personal, annual tax return.
This option is not usually a good fit for owners of companies that could incur significant liability due to the nature of the goods and services they provide. This is because this formation model does not afford owners with any personal liability protection in the event that their business incurs debts or is sued.
Partnership
Partnership structures usually function much like sole proprietorships do. The most notable exception between these formation options is that partnerships are owned by more than one individual or entity.
Limited Liability Company (LLC)
Like partnerships and sole proprietorships, LLCs offer owners (called members) a relatively flexible managerial structure. LLCs can also be owned by one or multiple members. Yet, LLCs also afford members personal liability protection in the event that a company is sued or cannot pay its debts. These companies can be taxed on the personal returns of members or as distinct entities like corporations. They take a little more time and effort to set up, but many business owners prefer the benefits and protections of this “middle ground” option.
Contact a Forward-Thinking Milwaukee Business Lawyer Today for Assistance
Once the knowledgeable Milwaukee, WI business law attorneys at Kerkman & Dunn are alerted to your need for small business planning services, we can begin walking you through the potential benefits and drawbacks of each of your business formation options. We can help you to make informed choices about each of these opportunities and assist you in navigating the formation process once you have selected the formation structure that is right for your entrepreneurial vision.
You are welcome to schedule a confidential, risk-free legal consultation at any time by connecting with our team via our firm’s webpage or by calling our offices at (414) 775-3485. You are embracing a great challenge and boldly taking steps to make your dream a reality. Allow us to help you successfully manage the legal aspects of your situation so that you can focus on launching your company with confidence. We look forward to speaking with you.
