An increasing number of sole proprietors have chosen to use one of the business entities that serves as an alternative to a sole proprietorship. From a general partnership to a corporation, there are several entity options that make it easier to run a company. Company owners have access to all of the entity options that work well.
A small business attorney Orange County can help business owners choose the entity that they need. Even though sole proprietorships are very common for individuals and married couples, they may not suit the needs of every business that well. The recent media focus on different types of entities for businesses in different states has made people more aware of these advantages.
Partnerships allow more than one owner, with differing levels of personal liability for each owner. For example, in a general partnership, all the partners share responsibility for losses. Limited liability partnerships, on the other hand, offer personal asset protection against debts.
Even though corporations are more complex than many other entities, they offer many advantages for California residents. It is a separate legal entity from the owners, protecting the owners from certain liabilities. Many people select this option when they would like their company to survive them.
Corporations can become S corporations, also known as small business corporations. All of the reported profits and losses pass through the stockholders, which eliminates the need for corporate taxes. Smaller companies find that this option helps them save money and makes filing taxes easier.
One of the types of business entities that many company owners prefer is a limited liability company. The limited liability provides the level of protection that a corporation offers. However, the income is treated as the income from a partnership.
Business owners who want to change the type of business entity they have incorporated will benefit from having so many options available. Making the change offers tax and other advantages in many cases. The good news about this option is that using a lawyer makes the process easier, so you don’t need to worry about doing it all on your own.