Tennessee Business Formation Lawyer
Starting your own business is an exciting, and often daunting, prospect. You’ll be pouring your intellectual energy and capital into your newest enterprise, so make sure it’s well-protected. The lawyers at Larry R. Williams, PLLC specialize in Tennessee business formation law, so your company will be covered no matter what structure you choose. Our experts can provide the necessary paperwork for:
Limited Liability Companies (LLC)
Smaller businesses often opt to structure themselves as LLCs, which are a distinct legal entity with its own tax identification number. The members of an LLC are not personally liable for the debts of their company, which is one of the distinct advantages of this structure. For example, if an LLC is forced to file bankruptcy, the owners won’t have to repay the company’s debts with their own money. LLCs also have tax-related advantages and don’t require the same extensive record keeping as corporations.
If you’re a small business and don’t have to manage multiple employees, an LLC may be the right option for you. This structure offers you protection from liability while avoiding the higher tax rates of other entities.
An S-corporation is a special type of company that’s created through an IRS tax election. It gets its name from its subchapter designation from the IRS, “S.” The process of becoming an S-corp is a legally complicated one, so it’s essential to have an experienced law firm in your corner. An S-corp is beneficial because it combines the flexibility and security of a limited liability company with the power of a corporation.
An S-corp also carries tax benefits, such as lower rates and extra available credits. An S-corp designation also allows a business entity to be independent of its shareholders. In other words, if a shareholder liquidates their shares and leaves the company, your business can carry on with minimal disruption.
An S-corp offers the stock options of a corporation and the tax benefits of an LLC. Establishing an S-corp requires filing the appropriate documentation, which should be handled by a legal expert.
A corporation is also known as a “C-Corporation,” based on its designation by the IRS. It functions as a legal entity that is owned by shareholders. Legally speaking, only the corporation, not its shareholders, can be held responsible for its debts and other liabilities. Corporations tend to be more complex than other business structures because they have higher administrative costs and more stringent taxing requirements. Because of their complexity, they’re usually reserved for larger entities and those with multiple employees.
Corporations are mandated to pay federal and state taxes after receiving a unique tax ID number. Unlike partnerships or sole proprietorships, corporations must pay income tax on all of their profits. Shareholders also pay income tax on their wages if they’re employees. Generally, companies only choose to structure themselves as corporations if they’re handling many employees, as competitive stock options may be a selling point for potential workers. Corporations can also raise funds through selling stock, which can be advantageous to some industries.
To establish your corporation, you’ll have to file articles of incorporation, which are weighty legal documents. To expedite your process, we recommend retaining the help of an attorney.
A Law Firm for All Your Business Needs
No matter which business structure you choose, filing the necessary paperwork can be a hassle for the uninitiated. Our legal experts are extensively knowledgeable about the necessary for establishing each kind of company. To get started on your business formation procedure, contact our office for a free initial consultation. We would be happy to address any additional questions or concerns you may have before starting on your next journey. Get in touch with us today.