STARTING OR EXPANDING A BUSINESS?
Get Help From Our Temecula Business Lawyers
When starting or expanding a business, one of most important decisions to make is the choice of the type of entity the business will operate as. The specific type of business entity can affect operational decisions and might affect how the entity or equity owners pay taxes.
Choosing the appropriate legal entity, such as a corporation or limited liability company, will help the equity owners minimize or avoid personal liability arising out of the business. This separation of an individual from the business, may also affect credit and protect personal assets.
Robert B. Rosenstein has experience in advising individuals regarding the creation of a new business. He has lectured on this subject on numerous occasions.
Mr. Rosenstein works closely with clients to make certain that the selected entity will provide the best opportunity of legal success and protection. He answers his clients’ questions and guides them through the process.
Types of Business Entities
Determining the correct type of business entity for operation a business requires careful evaluation. In California, there are several types of business entities to consider:
- Sole Proprietorship – This form of business is normally not recommended. This type of business is created when there is a sole owner of a business, and the person operates such business as an extension of himself, and usually has filed a fictitious business name
- Partnership – Similar to a sole proprietorship, this type of business form is not normally recommended. This form of business is created when two or more persons join together, in their own names, for the purpose of making a profit. Usually the individuals contribute money, property, labor, or skill to the business and share in the profits and losses of the business. At times, when the persons are corporations or limited liability companies, they may join in a joint venture, which is in reality a partnership, which is the only time we recommend that a Partnership is an acceptable form of business.
- Corporations- This is generally one of the two forms of business that we encourage our clients to operate under. When properly formed and when the formalities are maintained, this form of business entity provides protection to the shareholders, officers and directors (which at times may be one in the same). With proper planning, Corporations can provide not only asset protection, but can also provide a means of proper tax planning to help avoid paying unnecessary taxes.
- Limited Liability Companies- This is second form of business which we would advise clients to utilize in operating a business. While there are some concerns with using this form of business for operations, a Limited Liability Company will generally provide the Members (owners of the business interest) with a form of asset protection from creditors, and will avoid double income tax taxation. However, there are some problems with using a limited liability company, including the potential for additional taxes.
Meet with us to learn more, with the first 30 minute consultation to new clients at no cost.
In order to help determine what is the proper form of business under which to operate. Rosenstein & Associates has a policy of meeting with a prospective client for 30 minutes for a consultation at no charge. During this meeting you will meet with an attorney, usually Robert B. Rosenstein to discuss your needs. With over 35 years of combined experience, with over 20 years serving the Temecula Valley business community, we believe we can provide our clients with the business advice they need.