Thinking about Forming a Business?
Let our St. Paul and Minneapolis Business Lawyers Help
Business formation can be complex. A St. Paul & Minneapolis business attorney can help an individual choose the proper entity for his or her business. Steven H. Snyder & Associates can help with forming a:
- limited liability company (LLC)
- limited liability partnership (LLP)
- sole proprietorship
- general partnership
- corporation (profit and non-profit)
Choosing a proper entity is important and is based on the type of business being started being started, the tax laws for the type of entity and how much personal liability the client is willing to take, among other factors. Sound confusing? It can be, which is where we can help.
A sole proprietorship is a business owned by a single individual. The individual is completely liable for all business transactions, including lawsuits. A sole proprietorship does not offer the benefit of the corporate veil. A sole proprietor must use his or her own name and Social Security number to apply for credit for the business.
A general partnership allows the partner-owners to conduct business for profit. Two or more people have a partnership interest in the business.
Limited Liability Company (LLC)
A limited liability company (LLC) is an entity that provides certain taxation rules of a sole proprietorship, but affords the managing members the protection of the corporate veil.
Limited Partnership (LP)
A limited partnership (LP) has two types of partners: general and limited. The limited partners have a limited liability. They are usually only liable for debts and other obligations (including arbitrations and lawsuits) to the extent of their contributions.
A corporation, whether profit or non-profit, can continue business indefinitely. It affords the members the protection of the corporate veil. Board members are generally not individually responsible for debts and lawsuits, though under some circumstances they may be individually liable.
Each entity has its own tax rules. A qualified Minneapolis and St. Paul business lawyer can explain the tax rules for each type of entity. Lawsuits and other liabilities are also handled differently, depending on the type of entity chosen. Because of the type of business, an individual may not have a choice in the type of entity. For example, a company that wishes to become a non-profit must file as a non-profit corporation if it wants to receive a 501(c)3 tax certificate.
It is best to retain an experienced business law attorney to help choose the proper entity for your individual situation. He or she will advise you of your rights regarding the different entities, taxation issues of the different entities and liability risks of each. Please call our Minneapolis and St. Paul lawyer now to set up your initial consultation to decide what type of business is best for you.