Northbrook Business Formation Attorney Helping You Navigate Entities, Legal Steps & Agreements
Last updated on February 27, 2025
Starting a new business is an exciting adventure filled with promise and potential. However, one of the most important initial steps in launching your business is choosing the right business entity. The right business structure provides a strong foundation for your venture, influencing everything from your legal liability to how much you pay in taxes.
At our Northbrook law firm, Wiczer Jacobs LLC, our business startup lawyers assist entrepreneurs across the country. We can advise you on the different business structures and provide guidance so that you can make informed decisions that align with your business goals. We can also help you create the necessary documents and agreements you need to officially register your new company with the state.
Choosing The Right Business Entity For Your Startup
When deciding on a business structure, several factors must be considered to ensure that your corporate structure supports your vision and operational needs. Key considerations include:
- What type of liability protection do you need?
- What are the different tax implications for the various business models you are considering?
- What type of management structure will best suit your business operations?
- How easy is it to execute the business structure you are considering?
When selecting a structure that best suits your startup’s needs, you should also consider the nature of your business, your plans for growth, your personal and company financial needs and the level of personal liability you are willing to accept. Creating the right foundation for your business entity will help you move forward and give your new business the best chance of success.
What Are The Different Types Of Business Entities?
There are several different types of business entities that you can choose for your startup. Each option has its own advantages and challenges.
- Sole proprietorship: A sole proprietorship is a simple structure offering business owners full control. However, the owner assumes personal liability for the business’s debts.
- Partnership: A partnership involves two or more people sharing profits, losses and liabilities.
- Limited liability company (LLC): An LLC offers liability protection with flexible tax options and can be owned by an individual or multiple parties.
- Corporation (C-corp): A corporation is a separate legal entity that provides strong liability protection. However, corporations are subject to complex regulations. There is also potential for double taxation.
- S corporation (S corp): An S corp has some of the same liability protections as a C-corp. However, in an S corp, profits and losses are allowed to be reconciled in personal tax returns. This prevents the double-taxation that can occur in a C-corp.
- Nonprofit organization: A nonprofit organization focuses on charitable or educational purposes, often enjoying tax-exempt status.
An experienced business law attorney can help you assess your business’s goals and determine the best corporate structure for your start-up.
The Importance Of A Company’s Startup Documents And Agreements
Having clear and comprehensive partnership or shareholder agreements is crucial for business stability and success. These agreements:
- Define roles and responsibilities
- Establish parameters for profit sharing
- Set forth decision-making processes
- Provide frameworks for dispute resolution
- Establishes exit strategies
The startup documents and agreements for a business entity provide its foundation. They create a legal framework for managing your company and protecting stakeholders’ interests, thereby reducing the potential for conflicts and ensuring smooth operations. An established business startup lawyer with experience drafting complex contracts and agreements can help you evaluate your business goals and draft the necessary documents to create your business.
Consult A Business Startup Lawyer For Free
If you are starting your own business, our business startup lawyers offer free initial consultations. You can call Wiczer Jacobs LLC at 847-849-4850 or send us a message through our website to schedule your free appointment. Let us help you lay a solid foundation for your new company’s future.