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A free download of Legal Structure: How To Choose The Correct Business Structure by Attorney Demitrus Evans, and some useful excerpts to get you started from Profit From Your Intellect - coming in 2020.
For a limited time, we are offering Attorney Evans' premier self-published book and digital download, Legal Structure: How To Choose The Correct Business Structure - completely FREE.
We also want to give you a peek into her newest upcoming publication - Profit From Your Intellect - take a peek below...but before you do: let's talk shop about your business structure.
You've already been running your business successfully for many years. You're legally sound and turning a profit. You chose your S Corp structure in the early days of your business, and really haven't looked back since. Business structure is often overlooked or decided on early on with many other major but initial decisions for your business. Though it may seem arbitrary and unimpactful, the structure of your business can often make the difference between exponential and constant growth - and stagnancy. Here's a little information about the choices you have when deciding the structure of your business and a brief overview of the benefits of each.
The Sole Proprietorship is the simplest structure. That is because the entire entity is you. You take all the responsibilities and risks, you put in all the capital, keep all the minutes if you want them. You do it all, the business is not you separate from you. This is why it's difficult to sell the business because you cannot just sell you. You obviously have a lot of freedom - but you shoulder any and all liability - which must be a factor.
Partnerships allow you to share the responsibility without the formality of a more corporate structure. General Partnerships and Limited Partnerships. General Partnerships are two or more people coming together in business, contributing either money, skills, labor, or all of those. Each person shares in profits and losses, and in a lot of ways it's an extension of a sole proprietorship with some shared risk, but if either of you back out - you have major dissolution issues on your hands.
Corporations are the oldest corporate structure. There are S, General, and Benefit Corporations. When the corporation makes a profit, it then can declare dividends that its stockholders will receive. The stockholder's numbers can be unlimited and the stocks are protected from the creditors of the business. A stockholder normally has no personal liability and is limited to the amount of their investment in the corporation only. Corporations are eligible for certain rights like human beings, but as they are deeply formal, they require a lot of compliance with policy and regulations - and failing to do so can bury a company's potential before it reaches peak success.
The LLC structure offers the business owner limited liability while it is relatively easy to structure as compared with the corporate formalities. Upfront, however, LLCs can be more costly to form. If you form a single-member LLC, you own, manage, and operate your business alone. As a single-owner LLC, you can set your own business strategies and policies without having to consult or seek approval from others, but you may lose out on the professional experiences and insights of fellow owners.
The Non-Profit Corporation is only tax-exempt if the process is fully in compliance with the statutory requirements. The process is lengthy and the amount of time depends on the organization and the organizers. It takes the IRS time to understand the greater good that will be served. allow you to share the responsibility without the formality of a more corporate structure. Some major household names like the NFL, and IKEA, are Non-Profit Corporations, so being called a non-profit doesn't mean it isn't making money - just that it isn't owned. If ownership is important to you, this might not be the best choice.
2019 Attorney Demitrus Evans | Legal Structure: How To Choose The Correct Legal Structure
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