Formation of Business Entities in Menlo Park, CA
Choosing the Right Structure for Your Business
When starting a new business, you must decide what type of business entity
you want to establish. Choosing the right structure for your company or
corporation can help you maximize your chances of financial and operational
success. Legal and tax considerations will also enter into selecting an
appropriate business structure. At Flicker, Kerin, Kruger & Bissada
LLP, our business lawyers provide comprehensive representation for clients
who wish to form a new business in the Bay Area.
Types of Business Entities
The most common types of business structures include limited liability
companies (LLC), C corporations, S corporations, partnerships, and sole
proprietorships. Each offers their own benefits, including:
Limited Liability Company (LLC) - In a Limited Liability Company (LLC), personal assets can be separated
from business debts, and there is no limit to the number of owners. Additionally,
owners are not required to hold annual meetings and the company is governed
by operating agreements.
C Corporations - Like Limited Liability Companies, personal assets can be separated from
business debts in a C Corporation. Similarly, there is no limit to the
number of shareholders. In these business entities, tax and legal structures
are separate from the owners and the company can deduct fringe benefits
S Corporations - In an S Corporation, personal assets may be separated from business
debts. Additionally, owners report their share of profit and loss on personal
taxes. An S Corporation can attract investors through the sale of stock,
giving directors, shareholders, and officers limited liability.
Partnerships - In most cases, there is no state filing required to form a partnership.
Partnerships are typically easy to form and operate, and owners report
their profit and loss on personal taxes. In a partnership, the general
partner maintains management control.
Sole Proprietorships - Like a partnership, Sole Proprietorships do not require state filing
and are easy to form and operate. The owner must report profit and loss
on personal taxes and maintains full management control of the business entity.