Doing business is sometimes a mere matter of setting up shop and sometimes it is not. For either purpose, you may need the services of experts like the entity selection lawyer in Los Altos. This is the person who can help you choose which kind of enterprise you are going to be, and there are several classes of business entities to choose from.
The first and the most basic is a sole proprietorship entity, which is the simplest form of set up for trade or commerce. The person who owns or runs the business simply sets up shop anywhere and is taxed through his or her own personal income tax returns. All liabilities related to this outfit though are carried by this single person who has no need for incorporation papers.
All of the entities, by the way, have their own pros and cons. And to study each one closely will actually need some expert help, and any lawyer who has dealt with financial or commercial concerns often knows about selecting entities. The thing is that all the details may be found in legal forms or language and you have to clarify or understand many unique terms.
Another basic form is the general partnership, a little bit more complex than single ownership but still a process that does not need incorporation papers. This can help businessmen get some added flexibility in terms of liability. But there is a need for another set of papers which define the income sharing process.
Companies that are registered are corporations are some the most complex of these entities. And to select one of these will be something that you plan with some other stakeholders. You may start out as the founder, but upon incorporation, it is best to work out the founding member’s list with some other persons as partners.
The liabilities here are not carried by any one person but by the corporation. The C type can have stock of any kind, and this enables them to operate with an independent and flexible process in fluctuating markets. It may also be something that adjusts continuously to any financial or economic behavior.
The S kind of corporate entity is much like the C type of corporation but will be limited only to a maximum of 100 shareholders. In terms of taxation, the income of both these forms of business will be the sole basis for taxes. But the first two simpler entities can have taxes as part of their personal liabilities.
There are hybrids that could be found in states, but it all depends on what state you want to establish your outfit in. The most common and most used hybrid is the limited liability company or LLC, which can have the same but limited liabilities as corporations but could have its tax liability carried by a general partnership, the single owner or an incorporated status.
The lawyer here can specifically draw up a map for your business model and a plan of action. All states require complex corporate concerns to be fully documented and formalized through their specific standards. But mostly they are similar things in all states.