Which Business Entity Is Best for My Illinois Company?

If you are an entrepreneur, you are considering building your own startup, or you would like to change your business’s structure, you should know the options available to you. There are a number of different business structures from which you can choose, but they may not all be the right fit. You should select your business entity after looking at the size of your business, the number of owners and partners, the goals for your company, and what you want your future to look like. While it is important to do your own research, it is always best to discuss your options with a reputable and experienced business attorney. The following are general descriptions of various business structure options.

Sole Proprietorship

For those interested in having complete control of their business, a sole proprietorship may be the way to go. Evident in the name, sole proprietorship business structures have a single owner in charge of the business. This is the easiest business structure to follow as anyone who does business activities, but does not register as another type of business, is automatically considered a sole proprietorship. Those business owners who take this route do place their own personal assets and liabilities at risk since they are not separate from their business entities. This means that the owner can be held personally liable for any debts or financial obligations of the business.

Partnerships

Those who go into business with a friend, family member, or business partner enter into a business partnership. In a business partnership, there are usually two or more individuals starting a business together. Limited partnerships (LP) grant one partner with unlimited liability while the others have limited liability. Limited liability partnerships (LLP) grant every partner limited liability, and thus limited control, over the company. In these arrangements, the limited partners are protected from debts against the partnership, meaning they are not responsible for their partner’s actions.

Limited Liability Company

A limited liability company (LLC) is a good option for those who wish to keep their personal and business assets separate. This business structure keeps your personal assets, your home, vehicle, and other valuables safe in the instance that your business faces bankruptcy or lawsuits. There can be more than one member who has a hand in the LLC, but all members are considered self-employed and they must pay self-employment taxes toward Social Security and Medicare.

Contact a Naperville, IL Business Formations Lawyer

Whether you are new to the business world or have years of experience, you should always consider speaking with an experienced attorney throughout your career. Entrepreneurs and business owners place their personal savings and reputation on the line when they form their own business, so they should do so with the best preparation possible. the Gierach Law Firm, LLC has a team of professionals ready to look at the details of your business plans and provide you with legal advice on how best to proceed. You may be the most familiar with your services or product, but our attorneys are more experienced with the various business entities available to you. Our experienced DuPage County business law attorneys work with businesses of all sizes, helping them find the most appropriate kind of entity that will bring them success. Contact our Naperville office today at 630-756-1160 or our Hoffman Estates office at 847-519-0505 to schedule your initial consultation.

Sources:

https://www.sba.gov/business-guide/launch-your-business/choose-business-structure

https://www.fundera.com/blog/business-entity