Simplifying corporate formation in Franklin, Spring Hill, Columbia and Brentwood, TN
Story, Abernathy, Campbell, Ashworth, Yarbrough, and Hudson, An Association of Attorneys, believes that a business created with a strong foundation has the greatest opportunity for success. The attorneys craft corporate formation documents and tax and other business strategies that suit each client’s unique business needs.
Corporate formation options
A corporation is formed by one or more individuals or other companies or groups seeking legal rights and protections as a single entity. Your entity choice affects your personal liability, taxes and administrative structure.
Several main types of entities exist:
- Sole proprietorship — Sole proprietorship is suitable for individual contractors or small business owners who pay personal income tax on the company’s profits. Such entities require little documentation (you only need a business license from the county), and have little or no government regulation, but also do not protect the owner from personal liability for the company’s debts and actions.
- General partnership — Also requiring almost no documentation, this involves two or more business partners. A partnership agreement is highly recommended for laying out the rights and responsibilities of each partner. The general partners are liable for the company, and for each other’s actions.
- Corporation –One of the chief advantages of a corporation is the protection it affords shareholders from personal liability for the debts, fraud and negligence of the company or its employees, as long as the shareholders and corporation remain distinct.
- Limited liability companies (LLCs) — A blending of individual and corporate characteristics, the LLC invests in memberships, not shares of stocks. LLCs afford some liability protection for the actions of the company. Typically used by general partnerships and professionals, LLCs can cost more to organize and require time-consuming administrative work. LLCs do not pay state corporate taxes, and federal income tax is paid only on income paid to members.
- Limited partnerships (LPs) – Similar to a general partnership, an LP is formed by two or more associates in business together. It permits each partner to limit his or her liability to the financial contribution to the partnership. General partners are responsible for operating the entity and remain personally liable for it. Limited partners have little or no control but are protected from liability.
- Limited liability partnerships (LLPs) — An LLP permits the partners to have equal management rights but protects them from personal liability. Limited liability partners also must pay their share of business losses as related to their share of the profits.
Which entity is right for you?
The associated attorneys work individually with clients to assess their needs and priorities. Abusiness attorney can lay out the pros and cons of each choice of entity.
Regardless of which type of entity you choose, the attorneys deal with all documentation and paperwork filing with the Secretary of State, Division of Business Services.
The attorneys’ experience also includes purchasing and selling existing businesses. Through their significant contract law practice, the attorneys draft and review all manner of documents related to maintaining and growing a business.
Count on trusted legal partners in your business endeavors
Story, Abernathy, Campbell, Ashworth, Yarbrough, and Hudson, An Association of Attorneys, understand business priorities and how best to achieve them. Please contact the attorneys online to discuss your options.