When people decide to start a business, they usually have a great idea and some money to invest in the enterprise. Some people opt to start the business by themselves or with family members; others have partners or other investors who will not be involved with the management of the business. Our Chicago Business Litigation Attorneys put together a list of few factors that you should think about when looking for the right type of business entity.
Contracts – Most businesses execute contracts for space, services, and supplies. Businesses often have agreements between partners, investors, and employees. It is important to get it right so you don’t end up in court.
Complexity – In regards to complexity there is nothing simpler than sole proprietorship. However, the con of choosing sole proprietorship is that it will be hard for you to acquire funding from external sources. However, if you decide to have a partnership you will have to flesh out the roles and percentages of profits that need to be filed to the government.
Liability – How much liability is your business prone to bring? Is there a large sum of liability issues your business may run into? And if so, can you personally afford it? If you go into sole proprietorship, you have to be able to afford to be legally liable. If you cannot financially afford the liability you are subjected to you, you may want to consider a corporation.
Taxes – What income tax return do you want to file? Do you have a preference? Is there a way to minimize taxation? If so, how? However there are more options given to corporations, but it also has double taxation which puts you at a complete disadvantage.
Control – The choice of business entity often dictates the manner in which the business is operated. When it comes to control, sole proprietorship may be most advantageous. If you want complete control to what you please with your business and its daily operations, then you definitely should try your best to see if sole proprietorship is for you. Choosing the wrong entity may make you personally liable for the wrongs of employees or partners.
An attorney can help you avoid personal liability situations or help you minimize your risk. Contact Roth Law Group at 312-419-9599 for a Free Consultation Today and talk with a local, Cook County, Illinois attorney about how we can help your business.