If you currently own or hope to own a business one day, understanding the basics of business law should be the first thing on your list. Business laws dictate the way your business is formed and run and they involve the rules and regulations of each different type of business. Business laws often intertwine with other practices too, such as real estate, property, contract, employment and others. Considering the many different components, it’s important to work with an experienced Attorney to make sure your business is setup correctly.
Types of Businesses
There are many ways to structure and define your business. Each type of business comes with different rules and regulations, as well as benefits and liabilities. The different types of business structures include:
- Sole Proprietorship: A sole proprietorship is when a business is opened by a single individual or married couple. This method is good for small businesses that are starting up as they are easy to form and offer a lot of flexibility. Income is considered to be the owner’s personal income, so it’s only taxed once. However, the owner is solely liable for all debts.
- Partnership: Partnerships operate very similarly to a Sole Proprietorship. However, instead of one person or a married couple, Partnerships are usually between two individuals that are not married but agree to form a business together. The income is only taxed once, and both parties are equally liable for any debts incurred.
- Limited Liability Corporation (LLC): An LLC contains many of the aspects of a Partnership and a Corporation. The owners are able to be flexible in structuring their business and deciding between different tax treatments.
- Corporations: A Corporation is the most complicated business structure, as it carries special rights that a person does not. Corporations are formed and directed by shareholders. Individuals are not personally liable for any company debts. Tax benefits and incentives are larger and more complex.
If you have any questions about any business laws, it is important to speak with an Attorney. Business law is very complex and intertwines with many other areas of law. The professionals at Skinner & Associates have served businesses all over Central Ohio and would be happy to help yours. For more information, visit our website or call us at 614-664-0200.
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