What type of business entity should I choose?
When deciding the type of business entity to choose, there are several factors to consider. In Washington State, some of the most popular business entities include: Sole Proprietorship, Partnership, Corporation, Limited Liability Company (LLC), and Non-Profit Corporation. A Sole Proprietorship is the most basic type of business and is easy to set up with minimal paperwork and costs. However, this type of entity does not provide any personal liability protection. A Partnership is similar to a Sole Proprietorship but two or more people co-own the business. The partners are jointly and severally liable and personally responsible for the debts and obligations of the business. A Corporation is treated as an independent legal entity and provides its owners with limited liability protection. Additionally, a corporation may be taxed differently than other types of entities. Additionally, Corporations are required to observe formalities including holding annual directors and shareholder meetings. A Limited Liability Company is a hybrid entity that combines the limited liability protection of a corporation with the tax advantages and flexibility of a partnership. An LLC is relatively easy to set up and maintain. A Nonprofit Corporation is a type of corporation organized for charitable, educational, scientific, religious, or literary purposes. A nonprofit corporation may be exempt from taxes as long as it meets certain requirements. Additionally, like a corporation, a nonprofit is an independent legal entity and owners have limited liability protection. Overall, the type of business entity you choose should depend on your specific needs. It is best to consult with an attorney to understand the legal implications of each business entity and the best option for you.
Related FAQs
How do I form a professional corporation?What types of licenses does a business need?
How do I obtain a business loan?
What is a business contract?
What is a business plan template?
What is the corporate annual report?
What is a corporate compliance program?
How do I obtain a business credit card?
What is the best legal structure for my business?
How do I obtain a copyright registration?
Related Blog Posts
Understanding the Basics of Business Formation Law - July 31, 2023What You Need to Know Before Starting Your Business - August 7, 2023
The Financial and Legal Aspects of Starting a Business - August 14, 2023
Why It's Important to Have a Legal Guide When Forming Your Business - August 21, 2023
Navigating State and Federal Laws When Forming a Business - August 28, 2023