A formal business structure, whether it is a corporation, LLC, or limited partnership, foreign or domestic, formed in any state, adds value to almost all businesses and to their owners.
San Antonio, TX (PRWEB) May 26, 2016
“A formal business structure, whether it is a corporation, LLC, or limited partnership, foreign or domestic, formed in any state, adds value to almost all businesses and to their owners,” said James P. Robinson, principal attorney of Robinson & Associates, PLLC. “The simplest advantage of a business structure is that almost all types limit the personal liability of the owner. That is, if something goes very wrong, the assets of the business are at risk, but the personal assets of the owner(s) are not.”
For those thinking of implementing a formal business structure, Robinson lists the following three tips on the advantages of the different structures:
No. 1: Corporation. “Certainly the most well-known, corporations limit liability, but require attention to internal corporate formalities,” said Robinson. “This structure really should not be used unless you are prepared to hold regular board and shareholder meetings, prepare resolutions, etc. There are also a number of restrictions that do not apply to other forms.”
No. 2: Limited liability company. LLCs are the most commonly used today, and have the greatest flexibility and require the least formality. LLCs also have pass-through taxation by default, which means that company income is taxed only once, at the ownership level, instead of twice, at the company level and again at the ownership level, as in subchapter C corporations, although that can be altered.
No. 3: Limited partnership. “These are also passthrough entities and can be quite flexible,” said Robinson. “They are probably best when there will be some owners who are not involved in the operation of the company, such as an investor.”
Once a business structure is decided on, adds Robinson, people usually ask where it should be formed.
“A lot of people want to register in Delaware as it has good corporate laws,” said Robinson. “Texas also has some of the best corporate laws in the nation, and in legal terms is the equal of Delaware, but some people still feel there is a certain amount of panache in having a Delaware company. Remember, however, that place of formation is really about the law that governs the company’s structure. The company will still have to pay state tax in every state in which it does business, regardless of where it is formed.”
About James P. Robinson, Robinson & Associates, PLLC
James P. Robinson is the founder of Robinson & Associates, PLLC, a law firm with a national and international reach. Robinson & Associates has developed a practice providing comprehensive legal representation to businesses and entrepreneurs for issues related to business and commercial law, insurance disputes and international law. For more information, call (210) 822-2510, or visit http://www.jamesprobinsonlaw.com. The law office is located at 700 N. St. Mary’s Street, Suite 400, San Antonio, TX.
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