Articles & Resources

BUSINESS LAW - Which Organizational Structure Is Best for My Business?

Posted by T. Jake HinkinsMar 21, 20190 Comments

When forming a business, the first couple of steps to consider are: choosing a name for your business and registering your business. A good business law attorney can assist in verifying the availability of your chosen name and can ensure that it's registered and reserved with the appropriate state agency. In addition to the legal name you choose, you may want to choose a “Doing Business As” (DBA) name. For example, consider this scenario: John Smith sets up a painting business. Rather than operate under his own name, John instead chooses to name his business: “John Smith Painting.” This name is considered a DBA.

A corporation, nonprofit organization, limited liability company, and partnership are required to register with the appropriate state agency, and an attorney will know which organizational structure will work best for your business. Here are the main factors to consider:

  1. Tax Preferences
  2. Capitalization of the Business
  3. Whether You Plan to Issue and Trade Stock
  4. Management Structure
  5. Liability

Choosing the correct structure provides you with a level of protection from personal liability for your business's activities. Attorneys understand which operating documents, such as bylaws or an operating agreement, can help solidify the protection and functionality of your business.

Finally, many businesses are required to obtain proper licenses before doing business. We typically do not assist in obtaining this license, but we can help identify the appropriate entity from which to obtain one.