Princeton Business Structure Attorney
Before starting your own business in the United States, it is important to select an ownership structure for your new venture with the help of our credible Princeton business structure attorneys. The requirements for forming a business may vary from state to state and also depend on what industry you are in.
Our legal team at Inderjit K. Sidhu Esq. LLC will guide you through business matters and help you reach your potential as a business owner. We can help expedite the process and ensure your success. Contact our law office now and schedule a free 15-minute initial consultation with our seasoned New Jersey business law attorneys.
Why Do I Need a Business Structure Attorney in New Jersey?
One of the most important choices you will make when forming your new business is choosing a legal structure. Every business owner must choose a legal structure to operate, register and pay taxes. At Inderjit K. Sidhu Esq. LLC, our trusted Princeton business legal structure lawyers can help you with a broad range of business law needs.
- Wide range of legal services – Whether you are starting a new business venture, further expanding operations, or preparing for discussions on a tie-up or takeover with another company, we are here to assist you in any aspect of your business endeavors. We have in-depth knowledge of local business laws and regulations and are well-respected in the legal and business community.
- Extensive experience – With more than 20 years of combined industry experience, we are well prepared to handle business legal issues of any size or complexity. If business litigation becomes necessary, our experienced attorney in Princeton NJ will work tirelessly to defend your rights in court and provide the best possible results for your case.
- Work together to build your business – Our legal team represents clients planning to start their own companies as well as business owners looking to expand their operations and protect their interests. We are fully committed to the prosperity and success of your business. We are experienced at examining the needs of individual owners and helping them plan for their venture and determine the structure which best suits their needs.
Our business law firm has been committed to serving clients throughout Central New Jersey, including Princeton residents, businesses, and government entities. Contact our law office now and schedule a free 15-minute consultation with our qualified New Jersey business law attorneys.
What are the Types of Business Structures?
There are several types of legal structures for you to choose from, each with implications for your taxes, personal liability, partnerships, and registration requirements. Each type of legal structure has its pros and cons, and some are easier to set up than others. Since every business has unique needs and goals, it is crucial to seek legal advice from our skilled Princeton business legal structure attorney to help you find the best fit for your organization.
A sole proprietorship is considered the simplest of all the different types of business structures. You are the sole owner of your business and are responsible for its assets and liabilities. Under a sole proprietorship, there is no legal document that needs to be written except for possibly a business license, depending on what your enterprise is.
Though this type is generally the easiest to set up, it also involves the most risk. Since it has no protection from creditors or lawsuits, both personal and business assets are at risk. If your business is sued, the plaintiff may have access to your personal assets to satisfy a judgment. For tax purposes, all income you earn is considered ordinary income on your personal return.
In a general partnership, two or more people share ownership of a single business. The arrangement begins as soon as you start a business with another person. The details of this agreement should be written out formally to define the roles of each partner, including what would happen if the business fails.
The partners manage the business and are responsible for all debts and obligations of the business. This type of business structure is flexible and avoids income tax at the business level. All income earned will pass through to the partners and be taxed as ordinary income. However, partners are personally liable for any debts or judgments of the partnership, including debts or judgments against your partners.
If you are planning to be in or currently in a general partnership, it is imperative to have a competent Princeton business legal structure attorney by your side to help you protect your rights.
Limited Liability Company (LLC)
Although creating and maintaining an LLC will probably be more complicated and expensive than forming a sole proprietorship or partnership, it may be worth it depending on the nature of your business. The main benefit of an LLC is that the structure limits the owners’ personal liability.
Limited liability companies are often the best structure since they combine the advantages of corporations, which shield owners from personal liability for business debts and court judgments against the business, and partnerships, which eliminate income tax at the business level. The owners of an LLC pay taxes on their shares of the business income on their personal tax returns.
Limited Liability Partnership (LLP)
A limited liability partnership (LLP) is formed by two or more individuals going into business together. The personal liability in an LLP is limited to your capital contribution to the LLP. This means that your personal assets are not at risk because of the company’s losses or debts.
LLPs are pass-through entities. This means that the LLP doesn’t pay taxes for the business entity, and all profits are “passed” to the partners and taxed as personal income. Furthermore, an LLP is not required to maintain corporate formalities, such as annual meetings or corporate filings. All partners can conduct business for the LLP and participate in management duties.
A corporation is an independent legal and tax entity, separate from the people who own, control, and manage it. Sometimes referred to as a C corporation, a corporation is the most common form of business. However, it is more expensive to form and has a more complex structure.
The benefits of a corporation include limited liability which means that the corporation – not the shareholders – is held liable for the debts and actions of the business. In this type of structure, taxes are only paid by owners on corporate profits paid to them through salaries, bonuses, and dividends.