Business Formation Lawyer
Congratulations on starting a new business! Starting a new dream is a fun endeavor, and we want to make sure you have a strong foundation that matches your business goals and lifestyle. Colorado State Law, as well as personal preference and practicality, determine which business forms professionals, entrepreneurs, and other aspiring business owners choose when they start a business. The appropriate documents and filing are important, and will carry legal ramifications for you down the road.
Different business entities carry different advantages, disadvantages, tax consequences, and liability. Whatever your needs are, the business lawyers at Ores Law in Fort Collins and Loveland can help you determine whether a sole proprietorship, partnership, professional limited liability company, or a professional corporation is best for you. Then, we will properly prepare and file the appropriate documentation, so that you can get down to business.
This business structure is at the hands of one individual. The owner and operator holds all responsibility meaning all profits and losses are taken directly to the individual’s personal income tax return. This is both an advantage and a disadvantage. All control and decisions are made by the individual; however, this means that all debts may be taken from personal assets if the business fails.
Business partnerships may be defined by limited partnerships or general partnerships. A limited partnership consists of two or more individuals or businesses in which at least one person is the general partner (taking a majority of the responsibility and all of the liability and debt) and the other are limited partners (working together to provide opportunities to raise capital). The general partnership is an agreement of two or more individuals or businesses to pool resources to grow business. A general partnership does not require legal filing, but these partnerships are encouraged to state responsibilities in writing for future reference. The general partnerships are required to pay all debts from personal assets if the business fails.
A corporation is a business structure that builds a barrier between the business and the owners. Owners are considered employees to this business. The owners can sell stock in the business, giving limited liability to all shareholders. Starting a corporation may seem ideal for the reduced risk on a personal hit should the business fail, but many creditors require a personal guarantee for corporation loans.
Professional Limited Liability Company (LLC)
An LLC is a simple way for small businesses to use the benefits of a corporation’s liability protection while still filing taxes as a sole proprietorship. An advantage of having an LLC business is that the owner and operator can be one individual, but that owner’s personal assets are protected. If the business fails, debt collection stops at the business value.
This is simply a brief overview of a few of the major classifications for business formation in the state of Colorado. Please visit with Ores Law’s professional business lawyers in Loveland to discuss your goals and situation in order to determine the best route for your new business. We offer a free consultation.