...Partnerships, Corporations & Not-For-Profits
The process of forming a new business is relatively complex and requires thorough analysis. First and foremost, you must decide who will own the newly formed company and how this ownership will evolve in the near future. Equally important, is an ability to determine which legal business structure is most suitable for your business's daily operations. By the same token, you must consider how the selection of a business structure will impact your business taxes and insurance costs. These are only some of the important questions that should be answered before the final selection of a business structure is made.
Comprehensive Business Services
No matter how complex the business structure and its analysis, STEVEN IVY P.C. can help. The firm specializes in business formation law. We counsel clients on available business structures, their benefits and pitfalls. Depending on the circumstances, we register businesses with the state or federal authorities, obtain any necessary licenses and permits. The firm also facilitates, and documents, annual meetings of the board of directors and the company's shareholders. Our business services are comprehensive, designed to help our clients make informed decisions.
The hallmark of our practice is personal service. We work closely with our clients to ensure that their interests are properly protected. STEVEN IVY P.C. is servicing clients in several Illinois counties, including: Cook County, Lake County, DuPage County, Kane County, DeKalb County, Will County, McHenry County and Kendall County. Our clients can meet with us in eight Illinois locations, including: Chicago, Lisle, Northbrook, Oak Brook, Rosemont, Saint Charles, Schaumburg, and Warrenville.
Available Business Structures
There are several business structures available to every entrepreneur. However, each legal structure has its unique aspects that will impact operations, taxes and profitability of the new venture. Occasionally, the available business structures are modified by the state legislature creating minor differences between the states. Today, the most common business organizational structures include: 1) Sole Proprietorship; 2) Partnership or Limited Partnership; 3) For-Profit Corporation or Limited Liability Company (LLC); 4) Not-For-Profit Corporation.
Sole Proprietorship is the simplest form of business, because it is operated and owned by one person and does not require registration with the state authorities. However, from the legal perspective both the business and the owner are one and the same, making the owner liable for actions and debts incurred by the business.
Partnership & Limited Partnership
In partnership, as the name implies, the business must be owned by multiple individuals. The most common form is the general partnership, which does not require a specific documentation. Unlike a corporation, in a general partnership each partner shares equal responsibility for the company's profits and losses, its debts and liabilities. Another form of partnership is the limited partnership. Limited partnerships are usually created by one person or company (general partner), who will solicit investments from others (limited partners).The general partner controls the limited partnership's day-to-day operations and is personally liable for business debts (unless the general partner is a corporation or an LLC). Limited partners have minimal control over daily business decisions or operations and, in return, they are not personally liable for business debts or claims.
Corporations & Limited Liability Companies
For-Profit Corporation & Limited Liability Company (LLC): These forms of business structure create an independent legal and tax entity, separate from the people who own, control and manage it. Consequently, these business structures limit the owners' personal liability for business debts and court judgments against the business. Here, the corporation pays its own taxes, and the owners are required to pay personal income tax only on money they draw from the corporation in the form of salaries or bonuses. This form of business structure is more complex and costly. However, this form of business should be considered by small business owners running risks of lawsuits and high business debts.
Not-for-profit corporation structure is designed to carry out a charitable, educational, religious, or scientific function. A nonprofit corporation can raise funds by soliciting public and private grant money and donations from individuals and companies. The federal and state governments do not generally tax nonprofit corporations on money they receive, as long as such funds are directly related to the corporate nonprofit function.