Establishing Your New Business
Does your new business need to be established as a corporation, limited liability company or partnership? Would it be better for you to operate your new business as a sole proprietor? Bruning & Associates, P.C. can assist you with the establishment of your new corporation, limited liability company (LLC), partnership and/or sole proprietorship. New York University Business Professor Scott Galloway asserts that there will be opportunities for new businesses in the post COVID-19 era. Professor Galloway states: “There is no better time to start a business than about six months into a recession. Talent, rent, and operating costs are low, and prudence and grit are embedded in each new company’s DNA.” https://www.inc.com/magazine/202011/vickie-an/talent-management-labor-staffing-future-of-business-2020.html.
Generally, there are many benefits to operating your new business as a corporation or an LLC. Startupnation.com is just one of the online resources that catalogues the benefits of operating your new business as a corporation or LLC, and states:
- Limited Liability – Corporations provide limited liability protection to their owners (who are called shareholders). Typically, the owners are not personally responsible for the debts and liabilities of the business; thus, creditors cannot pursue owners’ personal assets, such as a house or car, to pay business debts. Conversely, in a sole proprietorship or general partnership, owners and the business are legally considered the same and personal assets can be used to pay business debts.
- Tax Advantages – Corporations often gain tax advantages, such as the deductibility of health insurance premiums paid on behalf of an owner-employee; savings on self-employment taxes, as corporate income is not subject to Social Security, Workers Compensation and Medicare taxes; and the deductibility of other expenses such as life insurance. For information on the types of tax advantages your business may gain by forming as a corporation, consult an accountant or tax advisor.
- Establishing Credibility – Incorporating may help a new business establish credibility with potential customers, employees, vendors and partners.
- Unlimited Life – A corporation’s life is not dependent upon its owners. A corporation possesses the feature of unlimited life, meaning if an owner dies or wishes to sell his or her interest, the corporation will continue to exist and do business.
- Transferability of Ownership – Ownership in a corporation is typically easily transferable. (However, there are restrictions on S corporation ownership).
- Raising Capital – Capital can be raised more easily through the sale of stock. Additionally, many banks, when providing a small business loan, want the borrower to be an incorporated business.
- Retirement plans – Retirement funds and qualified retirements plans, such as a 401(k), may be established more easily.
https://startupnation.com/start-your-business/plan-your-business/benefits-of-forming-a-corporation/. Generally, these same types of advantages are available when a business operates as an LLC.
Let Bruning & Associates, P.C. assist you with the establishment of your new business whether it be a corporation, LLC, partnership, or sole proprietorship.
Please contact the experienced attorneys at Bruning & Associates, P.C. at 815-455-3000 to schedule your complimentary consultation to discuss your new business.
Click here to learn more about Attorney Kevin Bruning.