Unincorporated and incorporated. What Legal Entity Should I Take for My Business

First Party.

One of the first decisions you must make when starting a new business is to decide that we will take legal entity. In the U.S. there are different options of both entities or unincorporated Unincorporated Entities as incorporating or Incorporate Entities.

The way perhaps more preferred by those who start a small business is unincorporated, for reasons of cost and complexity. Many people do not want to start incorporating your business until you are more confident this is going to give the expected results. If you choose not to incorporate your business immediately becomes the sole owner or Sole Proprietorship or Partnership partnership or automatically.

Sole Proprietorship (Single Owner):

If you do not have partners, regardless of their partner (must be legally married) may be your first consideration is legally choose to start your business, by far the most simple, easy and inexpensive, just ready to commence operations and .

The main disadvantage is that a single owner is financially responsible for your business (Personal Liability), then your personal assets could be at risk. For example if your business is involved in a dispute or complaint, you may be required to respond not only the capital of your business but also with their personal assets.

Partnerships (Business consists of several partners):

One is similar to Owner or Sole Proprietorship, the only thing in this case there are several people involved. Partnership A partnership or may be composed of two or more partners, little documentation is required. Likewise, the partners are financially responsible for the business (Personal Liability) and if necessary respond with their assets both business and personal.

There is also a form called Limited Partnership in which there is a general partner and one or more limited partners or limited partners. In this case the liability of limited partners is limited to money or property furnished for business and the general partner takes the remainder of the liability. In this case the limited partners are passive investors just a few.

In order to avoid future problems and possible disputes is commendable and I would add that vital prepare an agreement between the parties (partnership agreement) that includes the duration of the company, whether temporary or perpetual, the contribution made by each partner, whether money, time or goods, how they will make decisions, how they will distribute the profits and losses, and when, and what to do in case of dissolution or restructuring of the corporation or partnership.

It is always advisable to consult a lawyer.

Author: Karoline Ureña. Blog: www.bloghispanodenegocios.com