Corporate / Commercial Law
Forming Your Business
There are many different business structures to choose from when you start your business. Each has pros and cons. Some of the factors that have influenced people in making their choice as to the business structure includes:
Limited liability vs. Unlimited liability;
Desirability of perpetual existence;
Estate planning (whether it’s easy to transfer share ownership);
Number of proposed proprietors (a lot of proprietors vs. very few);
Relationship of proposed proprietors;
Employees (whether any employees are going to be hired);
Flexibility of structure (an important consideration in cases of joint ventures).
Different Business Structures:
1. Sole Proprietorship
A sole proprietorship is the most basic form of business structure. A major disadvantage of sole proprietorships is that there is no limited liability and all business and personal assets are at risk to satisfy the sole proprietor’s business obligations and liabilities.
A Partnership exists when two or more persons, carry on business together with a view to profit. A partnership is like a sole proprietorship in that it is relatively inexpensive to set up with few legal formalities required to create it, and the partners carry on the business themselves directly, since the partnership is not a legal entity separate from its partners.
3. Joint venture
There is no precise legal definition for joint ventures. It’s most a collaborative effort of two legal entities for a specific project.
A corporation is a legal entity district from its owners. A corporation can own property, carry on business, possess rights, and incur liabilities completely separated from its owners. Shareholders own the shares of the corporation, but they do not own the property belonging to the corporation.
HTW Law will help you make an informed decision as to which business structures best suite your scenario. And once you have decided on the business structure, HTW Law will then prepare all relevant documents such as partnership agreements, shareholder agreements, articles of incorporation, depends on which business structure you have chosen; to make sure that all rights and obligations of each party involved is reduced to writing; and that the financial interests of all related parties are properly protected.
HTW Law can help. Call us now at 647-849-6582 or send us a message if you have some legal questions / inquiries or want to schedule an appointment with HTW Law.