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san antonio business planning attorney
Starting a new business can be exciting, but it can also be overwhelming. Weisinger Law Firm makes obtaining the proper legal documents and choosing the proper entity stress-free. Our motto “Peace Through Planning ®” translates well into the world of business. We walk you through the entire process so you get peace of mind knowing you have selected the best form of business structure to protect your investment. We help clients form sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. Call us today to set up a consultation and get your business started!
sole proprietorship & general partnership
Starting a business as a sole proprietor is as easy as putting a sign in your front yard and offering your services for hire. If you and a friend do this, you have created a partnership. This is the easiest way to go into business. However, it is also the most dangerous. Most businesses fall into this category by default rather than choice. When operating in this manner, there is no separation between the individual and the business. Poor business choices or just plain bad luck can cause you to lose both business and personal assets.
While fraught with the most personal liability, it is also the easiest to set up. Most businesses that have employees, or do work in sensitive or dangerous areas, should consider a business structure with more protection for the business owners.
limited liability companies
Limited Liability Companies (LLCs) are very common today and are by far the most popular choice for small businesses. LLCs were created with the idea of combining the best of both worlds – the liability protection of a corporation combined with the ease of use of a partnership. To a large degree, the LLC has been very successful at reaching this goal. LLCs, when operated correctly, offer the same degree of protection as a corporation. The key concept is to separate the business from the individual. LLCs have a formal creation process and must be registered with the state. Instead of a corporation’s bylaws, the LLC uses a company operating agreement to define and explain how the business is operated.
A major difference between Corporations and LLCs is that LLCs do not have stock, but rather have “ownership interests”. The LLC needs to be clearly separate from the operators, with clear records and procedures. To maximize liability protection, the LLC should mimic corporate procedures and conduct its operations in a formal manner.
Corporations are a good fit for larger companies and companies that are going to be generating capital through investors. They have a variety of reporting requirements and must be operated in a formal manner. Corporations, when operated correctly, offer the most secure liability protection to its owners and investors. Investors are attracted to the standard requirements and disclosures that a company will provide in addition to the liability protection. Corporations can issue various classes of stock that allow ownership and profit sharing without diluting management or control. The majority of new business owners should only consider a corporation if they have either the experience or infrastructure to operate one successfully.
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