Starting a business is an incredibly exciting time, but it is also time-consuming. Although you are an expert in the area of business you are about to embark upon, you will also face many legal issues, and understanding business law is not something in which all business owners are well-versed. This is often one of the biggest fears of business owners, as they worry about the implications on their business if they make a legal misstep. There is no need to worry, however. Most business owners feel this way, and they simply need the help of a Cleveland business formation attorney to sort things out.
When many business owners are starting a business and they know they are going to be the sole owner, they often assume that they should form a sole proprietorship. However, this is not always the best solution. A corporation or LLC can provide many benefits sole proprietorships cannot. LLCs and corporations are treated as individuals in the eyes of the law. They can sign contracts, own assets, and even sue in court, or be sued by someone else.
This is an important distinction. If an LLC is sued, only the company is liable. If a sole proprietor is sued, then he or she is personally liable, which could place the owner’s home and other assets at risk if the business accrues substantial debt.
It is important to understand the importance of forming a legal entity for your business. It is just as important to know which type of entity is right for you. Each has its own pros and cons, and business owners should speak to a Cleveland business formation attorney who can help them understand which one is right for them.
While forming an LLC can be quite simple, the process quickly becomes complex if the business owner has intricate or unique needs. There is some paperwork involved in creating an LLC, including articles of organization, an EIN, and an operating agreement. An attorney can help draft and complete these documents properly.
Forming a corporation can take a bit more time than forming an LLC, and there is also an extensive amount of paperwork involved. For many business owners, though, corporations hold many benefits over LLCs. For example, corporations pay taxes at the business level, whereas income and losses for LLCs must be reported on the business owner’s personal tax return.
Without a full understanding of the many benefits and implications an entity can have, it is difficult for business owners to know which type of entity is right for them. A Cleveland business formation attorney can help any business owner come to the best decision.
At Niekamp, Weisensell, Mutersbaugh & Mastrantonio, LLP, we are Cleveland corporate lawyers who understand that the very first steps you take as a business owner will greatly impact the future success of your company. As such, we want to help you make an informed and knowledgeable decision. Contact us today or fill out our online form for your free confidential consultation to learn more about how we can help you and your business.
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