What does it mean to be legally structured?Plainly put, being “legally structured” means that the government will be digging into your business’ wallet, and not yours. Deciding what structure you should have for your business will affect what legal paperwork you will have to fill out, how much you will pay in taxes, and how liable you are for legal financials of your business.
What are my options?There are several options to choose from when it comes to being legally structured.
A few examples are:
Sole Proprietorship - an unincorporated business owned, and run, by one individual with no distinction between the business and the owner. You are entitled to all profits and are responsible for all your business’s debts, losses and liabilities. Limited Liability Company - designed to provide the limited liability features of a corporation, and the tax efficiencies and operational flexibility of a partnership. Cooperative - a business or organization owned by and operated for the benefit of those using its services. Profits and earnings generated by the cooperative are distributed among the members, also known as user-owners. (C) Corporation - an independent legal entity owned by shareholders. This means that the corporation itself, not the shareholders that own it, is held legally liable for the actions and debts the business incurs. S Corporation - similar to a C corporation but you are taxed only on the personal level. Partnerships
General Partnership - assume that profits, liability, and management duties are divided equally among partners.
Limited Partnership - allow partners to have limited liability as well as limited input with management decisions. These limits depend on the extent of each partner’s investment percentage.
Joint Venture - acts as general partnership, but for only a limited period of time or for a single project.
Who do I have to go to in order to get legally structured?
All incorporations have to be filed through your state’s division of corporation. For information on where to file for your state reference the list below.
Alabama Indiana Nebraska Rhode Island Alaska Iowa Nevada South Carolina Arizona Kansas New Hampshire South Dakota Arkansas Kentucky New Jersey Tennessee California Louisiana New Mexico Texas Colorado Maine New York Utah Connecticut Maryland North Carolina Vermont Delaware Massachusetts North Dakota Virginia Florida Michigan Ohio Washington Georgia Minnesota Oklahoma West Virginia Hawaii Mississippi Oregon Wisconsin Idaho Missouri Pennsylvania Wyoming Illinois Montana
Please note: If you are opening a nonprofit there are certain articles that must be on file to ensure your nonprofit gains it’s tax exemption status. If you need help gaining your exemption status give us a call we have a 100% success rate with helping nonprofits gain their tax exemption.