Small Business Options
Small Business owners have special needs. Most are often too busy worrying about the day-to-day operations of their business to take care of the protecting their business and their personal assets from the liability that can be created by operating a small business.
That is where Central Park Law comes in. We have been helping Michigan Small Business owners protect themselves and their businesses by creating rock solid Limited Liability Companies, Corporations and Partnerships for almost 20 years.
Central Park Law works closely with Small Business owners to create the documentation and organizational systems necessary to secure their business for today and for tomorrow so they can concentrate on building a business that can support their family and provide a legacy for future generations.
Every Small Business should be organized in a way that provides liability protection for the owners without creating additional hassle and expense. For most small business owners a Limited Liability Company (LLC) is the best way to incorporate their business, provide liability protection, and protect their business for the future without creating complicated documentation and reporting requirements.
Small Businesses can be organized in a variety of ways but there are a few that are the most common:
SOLE PROPRIETORSHIP:
This is a single owner business that has not formally incorporated with the State. It is the simplest way to organize your business, but provides NO LIABILITY PROTECTION. All income is reported on the owner’s personal tax return.
PARTNERSHIP:
A partnership is very much like a Sole Proprietorship, except (you guessed it) there is more than one owner. Because there is more than one owner it can be more complicated to set up, but there is still NO LIABILITY PROTECTION. Income is reported on the owners’ personal tax returns in relation to the percentage of the business each of them owns.
CORPORATION:
Most larger business are corporations. It is the most complex business structure. If you own stock, you are a part owner of a corporation. The stockholders are the owners. Stockholders elect a Board of Directors and the Board of Directors elects officers, usually a President, Vice President, Secretary and Treasurer. One of the biggest advantages of a Corporation is that if the Corporation is sued, the individual stockholders are not personally liable for the damages. A stockholder only risks the money they have invested in their stock. A big disadvantage of a Corporation for a Small Business is that it is complex and has strict reporting and documentation requirements. For most small businesses, having Shareholders, Directors AND Officers just doesn’t make sense.
LIMITED LIABILITY COMPANY (LLC):
The Limited Liability Company is the new kid on the corporate block. It was designed to be a hybrid between a partnership and a corporation. It takes the simplicity of a Partnership and the Liability Protection of a Corporation and merges them together. For most small businesses in Michigan a Limited Liability Company is the best way to incorporate their business. It protects the personal assets of the owners from the liabilities created by the business and it provides a formal structure for the business without being overly complex. The annual reporting requirements of a limited liability company are not difficult to meet and an LLC owner can choose to have the LLC income taxed as personal income, partnership income or corporate income. It is by far the most flexible way for a small business to incorporate. You can even create an LLC Online.
It is quick, easy and painless.
We help you every step of the way.
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