Northeast Indiana Business Formation Lawyers

When creating a new company, entrepreneurs and business owners in Indiana can choose from several business formation types. Each business structure offers unique advantages and disadvantages, so it’s important to understand the different types of business formation available before starting a business.

You may save time and hassle by seeking advice from a business formation lawyer to ensure you select the right business type for your entity and meet all the requirements under state law. The team at Andrews & Crell, PC, can help. We’ll explain the various business types and can help with any legal filings that are required.

Sole Proprietorship

The simplest type of business structure is a sole proprietorship. It’s a type of business owned and operated by a single person. Sole proprietors are responsible for all aspects of their business, including its debts and legal liabilities. Sole proprietorships don’t require any formal registration with the state, but the owner must obtain any necessary permits and licenses to operate legally.

Partnership

A business that is owned by two or more people is a partnership. Partners must share in the profits and losses of the business and are jointly liable for the company’s debts and legal obligations. Two types of partnerships exist – general partnerships and limited partnerships. In a general partnership, all partners have equal management authority. A limited partnership, on the other hand, will have at least one general partner and at least one limited partner. Every partnership should have a business lawyer draft their operating agreements to help avoid misunderstandings and ensure the terms between the partners are clear.

Limited Liability Company (LLC)

A limited liability company, or LLC, is owned by one or more members who are not personally liable for the company’s debts and legal obligations. LLCs are a popular type of business because they combine the flexibility of a partnership with the liability protection of a corporation. The owners of LLCs must follow specific steps to set up and maintain their business with the state in order to preserve liability protections.

Corporation

A corporation is a legal entity separate from its business owners. Corporations are owned by a group of people or organizations known as shareholders. Corporations offer the most significant liability protection for business owners, and the shareholders are not personally responsible for the company’s debts and legal obligations. Compared to other businesses, corporations are subject to more regulations and formalities and are typically more expensive to set up and maintain. Legal guidance is highly valuable when creating a corporation.

Nonprofit Organization

A nonprofit organization operates for charitable, educational, or other public service purposes. Nonprofits are exempt from most taxes and have unique reporting requirements. Nonprofits in Indiana must register with the Secretary of State and obtain tax-exempt status from the Internal Revenue Service (IRS).

Speak with a Business Formation Attorney in Indiana

New business owners can choose from various types of business formation, and each offers distinct benefits and drawbacks. The best choice for your business structure will depend on several factors, including the size of the business, the nature of the business, the number of owners, and the potential risks and liabilities. Consulting with a knowledgeable business attorney can help you determine the most appropriate business structure for your specific needs.

If you are starting a business or would like to update your business entity for greater protection, consult with the experienced business law attorneys at Andrews & Crell, PC. Contact our law firm today for more information.