Comprehensive Counsel for Entity Formation in Tennessee
Assisting entrepreneurs, owners, shareholders, partners, and directors
Business owners and operators are faced with innumerable choices every day. For entrepreneurs and start-ups, however, deciding what kind of business to form will inform many of those decisions, and help minimize risk in the process. The Law Office of Perry A. Craft, PLLC offers guidance and advice to clients who wish to start their own business, are restructuring their current company or are seeking joint ventures with existing businesses.
Choosing the right entity
The entity an entrepreneur chooses affects not only liability, but also tax issues. The Law Office of Perry A. Craft, PLLC assists clients in the formation of:
- Sole proprietorships. The most basic business entity is the sole proprietorship. A sole proprietor needs only a Social Security number and the proper licensing, and remains in total control of the company’s progressions. The government has limited involvement with sole proprietorships, and only taxes revenue once. However, an individual’s personal assets are viewed as the same as the business’ assets if the documentation is drawn up incorrectly, or if the owner isn’t fully aware of how the law views such businesses.
- Corporations. Unlike a sole proprietorship, a corporation is its own legal entity; in the view of the government, corporations are essentially “people;” therefore, an owner’s personal assets and liability are separate from those of the company. The government has far greater oversight into corporations, however, and entities are taxed separately.
- Limited Liability Companies (LLC). An LLC is like a corporation in that personal liability is limited. LLCs may be owned by an individual, by another entity (like a corporation) or by partners. Control of the company can be sold through shares, and certain LLCs may be subjected to fewer taxes than standard corporations.
- Partnerships. A partnership can exist between individuals or between business entities. Like a sole proprietorship, a partnership provides very little protection from liability; thus, any debts incurred by one person are the responsibility of all partners. However, any assets brought in are also shared equally. Because the tax laws for partnerships are complex, it is crucial to speak with a business attorney before starting or merging a company.
- Limited Liability Partnerships (LLP). Simply stated, an LLP allows for a “silent” partner, who retains no control over how the company is managed after s/he makes an initial investment. The day-to-day operations are managed by a “general” partner, an individual or another business entity, which also retains all liability for the business. LLPs are notoriously complex entities, as the limited partner can become a general partner if s/he oversteps the boundaries. The costs associated in forming an LLP can be higher and the company may be subject to securities laws.
Forming the best business for your needs
The Law Office of Perry A. Craft, PLLC makes the business formation process easier for our clients. We walk our clients through the process of choosing the right entity to suit their business model. For more information about business formation, please call 615-953-3808 or fill out our contact form to reserve a consultation time.