The nature of legal education you have for your business is a very vital influence on the success or failure of your business. This is because your ability to make decisions quickly to compete in the market and to pay the extra money is necessary, directly related to the legal structure of the company.
There are three basic legal structures to choose: sole proprietorship, partnership and corporation or limited liability company. No one form is better than the other in itself, because each has its advantages and disadvantages. So what is absolutely necessary to the legal structure that have chosen the best for you.
There are a number of questions you should question yourself when deciding to choose the kind of business. What I know about these types of businesses? In what areas of the company I need help? How much money do I start? Where can I get money if I want to upgrade to a later date? What kinds of risks, I will be exposed later? How can my responsibility? What should I pay taxes?
Proprietorships
Over 75% of all U.S. businesses are sole proprietorships. The fundamental nature of this business is that they stand by one person and most often that person is directly involved in the daily management of the company concerned. As a sole trader, you have full responsibility for the company and all profits from this activity will be like all the debts and liabilities.
The advantages of a sole proprietorship is that you are the only owner, it is very simple to start, you keep all income taxes on business income as personal income, and you can stop whenever you want. The disadvantages are that you take on unlimited liability, limited your ability to increase capital investment, you have the ability, still accounting, advertising, employees can save high quality can be hard and society is limited to the duration of life of its own.
Partnership
A partnership is when two or more people share ownership of the company. The partners are collectively responsible for any choice, even if the choice could be unevenly with the consent of all partners as well. All agreements should be made in writing, preferably with a lawyer.
The advantages of a partnership is that you get advice from others, it is simple to start, more investment capital available to pay the partners and tax income, partners staff high quality are manufactured, they can encourage them to stay. The disadvantages are that partners have unlimited liability, the benefits must be shared, partners can dispute and the life of society is limited by death.
Body
A corporation is different from other models in society because a society, but as a “person” of the law. It has a life quite separate from its owner. As such, it can sue. The advantages of a corporation, limited liability, shareholders can obtain from the company as capital investment, they have an unlimited life, ownership is easily transferable and they rely on experts. The disadvantages are that it is taxed twice commissioning expensive, and they are more regulated.
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