Starting a Business in WV? Find an Experienced Attorney
Where to Start When Forming a New Business: Bailey Legal Services
So, you’re in the process of starting a business in WV. You’ve chosen a name, a few staff members, and are excited to start production on your first hot product. Where do you start to really get the ball rolling? Speaking with an attorney that specializes in business formation can help. Bailey Legal Services, PLLC, in Barboursville, WV, is here to work with you to properly set up and structure your business, no matter if it is a sole proprietorship or a corporation. This month, we’re going to break down the types of business structures and a few aspects of business formation that many overlook.
There are many small details that go into starting a business that you or a partner can easily overlook, or may not even know exist. Cover all of your bases by working with a well-practiced attorney.
The Four Types of Business Structures – Where Do I Fit?
Starting a business can be daunting, and finding the right way to structure your new business is a very important step in the formation process. Each business type has different processes and different ways of handling factors like taxes, liability, and other things you may not consider right away. When deciding on the structure of your business, check out the following types to see what may work best for you:
A sole proprietorship, as the name suggests, has a single owner. Freelance workers, independent contractors, and commission-only jobs are a few types of everyday sole proprietorships that you may recognize. Sole proprietors may find that they have a simplistic start up, but there are some things that you may need help with, including taxes, liability, and any permits that you may need to conduct business. It is also important to properly register and complete any necessary paperwork.
According to the law, you and your business are the same entity in a sole proprietorship. It is important to know that you are responsible for any debts, business expenses, and other issues that may arise while in business. When you are unsure about any loans, paying suppliers, or other regular expenses, talk with an experienced attorney to make sure you have the correct paperwork and financial planning.
A partnership is a business structure with two or more people running the show. There are different types of partnerships that have different responsibilities and require different variations of liability for your business. Discuss the advantages and disadvantages with your partner(s), and get to know who you are getting into business with. This can include diligence such as credit checks, resumes, their online presence, and other important aspects of being a partner in a large company.
One crucial step of beginning a partnership is drafting a partnership agreement. This document will outline the roles of each partner and will handle earnings, losses, and everything in between. Talk to attorney Michael Bailey of Bailey Legal Services, PLLC, to begin drafting your partnership agreement.
Similar to a sole proprietorship, a partnership does not pay income tax. Partners themselves are not employees and have specific tax forms to file. The IRS provides detailed information on what to expect when it comes to tax time for your new partnership.
Corporations are larger-scale businesses whose laws vary from state to state. Those looking to start a corporation must be sure that their name falls under state regulations, file articles of corporation, create bylaws, create a board of directors, get the proper licenses and permits, issue stock shares, and double check with appropriate parties that you’ve completed these tasks properly. An attorney can work with you to ensure that your corporation’s bylaws are accurate, and can provide legal advice or assistance when creating agreements and other complicated aspects of working with multiple partners.
There are many resources available online to incorporate your business. Do proper research before giving any personal information to an online service.
S Corporations vs. C Corporations
Did you know? C corporations and S corporations fall under different tax statuses, and S corporations have specific tax advantages. Weigh the pros and cons with your partners, and talk with attorney Bailey about what may work best with your corporate structure.
Limited Liability Companies (LLCs)
Limited liability companies, commonly called LLCs, help to reduce the liability for a business owner to their share of the company. Most types of businesses can form an LLC in order to protect themselves from some lawsuits. There are actions that owners can still be held liable for, so it is best to understand where you can default in an LLC. Bailey Legal Services, PLLC, can help you understand the advantages and disadvantages of starting an LLC in West Virginia.
LLP vs. LLC
Do not confuse a limited liability partnership (LLP) with a limited liability company (LLC). LLPs, of course, are partners, while LLC owners are considered members. An LLP is also responsible for managing themselves; LLCs can bring in outside management if they so choose. Liability is also a large difference, so be sure to research and speak with an attorney to fully understand the legal obligations you face in both an LLP or LLC.
Starting Charitable Organizations and Nonprofits
Similar to a business, charities and nonprofits are just as work-intensive to start up and it is important to pay close attention to every detail. Types of nonprofits can include religious organizations, charities, veterans organizations, and social welfare organizations. As with other business structures, it is best to understand the tax implications and how to properly register your organization with the state.
The Council of Nonprofits provides a range of free resources to give you an understanding of everything that goes into starting a nonprofit, and how to properly cover your bases. As we’ve mentioned, consulting with an experienced attorney can help you with the fine details and keep you on the right track.
I’m Ready to Start the Business Formation Process – I Need an Attorney!
Whether you are ready to learn more about starting a sole proprietorship, or are looking for legal advice for your new nonprofit organization in the Barboursville area, Bailey Legal Services, PLLC, is here to help. Attorney Michael Bailey has experience in business formation, and can help you understand any state regulations, review bylaws, help with trade registration, and can work with you for drafting partner agreements.