Selecting the correct structure for your business can be integral to the success of your entrepreneurial venture. Whether your vision calls for a small business or something larger, making the best business structure choice is a vital first step.
At the law office of Anthony A. Fatemi, LLC, our primary concern is to ensure that the business structure you pick is the one best suited for you and your business. Our team of Maryland business formation attorneys is here to utilize our knowledge and experience to help you end up with a structure that is optimized for your situation.
This is crucial because a wrong choice can have catastrophic consequences for you and your business, especially when it comes to taxes. With that in mind, here's a brief overview of some of the structure options available here in Maryland:
Incorporation is one of the most frequently chosen options. In this structure, you create a controlling document called Articles of Incorporation. Even if your business is based outside Maryland, you can still set up your business as a Maryland corporation. (Similarly, you can also incorporate your Maryland-based business in another state.)
Under this structure, shareholders generally cannot be held personally liable for the actions of the corporation. Often, a corporation's officers cannot be held personally liable, either.
There are two main types of corporate structures from which you can choose, the C corporation and the S corporation. One of the most important distinctions relates to federal income taxes.
Another option is to create a partnership. Partnerships, like corporations, come in more than one variety. There's the General Partnership and there's also what's called a Limited Liability Partnership (LLP). Either of these can include two or more partners.
LLPs may offer certain advantages over general partnerships when it comes to civil exposure. Partners in a general partnership are exposed to the same level of liability as sole proprietors. An LLP, by contrast, may offer important protection when it comes to protecting partners' personal assets. That protection, however, is predicated on the LLP's conducting all required meetings and maintaining detailed records.
One very popular option for people who have small or intermediate-sized businesses is the Limited Liability Company (LLC). As opposed to Articles of Incorporation, an LLC's creation document is called an Operating Agreement.
There's quite a bit of flexibility when it comes to the ownership of an LLC. LLC owners, who are called members, can be individual people or they can other business entities. An LLC can be owned by just one owner ("single-member LLC") or by multiple people and/or entities ("multiple-member LLC"). There are relatively few restrictions on how an LLC crafts its operating agreement, which means that the owner(s) of an LLC have wide freedom in terms of establishing its organization, operation, and management. As the name implies, LLC members are protected from liability, so long as the company maintains all required paperwork, records, and filings, as well as pays its taxes.
As you can see, there are lots of options. You probably have questions about what suits you and your business best. The knowledgeable Maryland business formation attorneys at the offices of Anthony A. Fatemi, LLC have the answers you need... and upon which you can confidently rely. Call us at (301) 519-2801, or submit our online contact form today. We look forward to hearing from you and facilitating your business's future success.