Starting a new business is an exciting time for any prospective business owner in Virginia. The start-up process can be thrilling for someone who has always wanted to be an entrepreneur, but there are also several important things to consider during this time. The decisions made at the very beginning will affect a business for years to come, which is why it is crucial to think clearly about long-term goals.
One important decision you will have to make during this time is deciding which type of structure is best for your company. Choosing an entity will affect multiple aspects of your operations, and you have to look at your long-term goals and objectives for the future before deciding. Each company has different goals, which is why there are several types of entities you may consider.
What should go into this choice?
You have to look at several aspects of your company operations when thinking about which type of structure will work best for your business. When weighing your options and looking at different types of structures, consider how each one will affect the following:
- Tax obligations
- Potential future liabilities
- Investment needs
- Expenses associated with establishing a certain type and running it
One of your main goals as a business owner is to ensure that if things do not go well with your company, you will not find your personal assets on the line, such as your home. There are certain ways you can limit your personal liability, which can provide you with immense peace of mind.
One of the most popular choices is a limited liability company, or an LLC. Like the name suggests, this structure limits the liability of the owner for debts owed by the business or claims made against the company. One drawback to the LLC option is that it can be more expensive to establish. Additionally, the owners of an LLC will pay taxes on business profits on his or her personal income taxes.
An important decision
This is an important choice, but you do not have to make it on your own. There are significant benefits in working with an experienced business law attorney who can help you understand the implications and benefits of each entity structure, including an LLC. To start, an assessment of your business plan, your goals and other factors will help determine the most appropriate way to proceed.