Dallas Business Formation Attorneys
Before you open your own business, the Dallas business formation attorneys at the Duke Firm, PC think it's important for you to understand the basics of business incorporation.
One of the most common structures is a corporation, or a business entity, which acts to shield its owners, or stockholders, from liability. Corporations have unlimited life span, so the death of an owner doesn't have to mean the end of the company. Corporations can also:
- Raise funds through sale of stock.
- Establish employee benefit and retirement plans.
- Change ownership through a sale or stock transfer.
Corporations must abide by a strict set of rules and regulations established by the IRS and the state in which they are formed. In addition, they are also subject to double taxation -- once on corporate income and again on any distribution made to shareholders.
Other categories of businesses include:
A sole proprietorship, which is a business that has no legal separation from its owner. The debts of the business are those of the owner, so there is little or no protection from liability.
A partnership is formed when two or more people agree to go into business together. While a partnership may be somewhat more beneficial than a corporation from a tax standpoint, it does not provide the same degree of liability protection for owners.
A limited liability company (LLC) is a less formal business structure, providing limited liability for the owner (often one person) and paying no corporate taxes.
Non-profit organizations exist to further their own defined goals. They do not distribute excess profits to owners or shareholders and are usually tax exempt.
Businesses that operate under a name different from that of their owners are said to be "doing business as," or DBA.
The structure of your business is one of the most basic -- and most important -- decisions you'll make when setting up shop for yourself. Don't take it lightly. Making the wrong decision can be costly, both now and in the future.
