What’s the Best Business Structure for my Company?
A Hoffman Estates Attorney Discusses Restructuring
When you initially started your business, you chose to incorporate a certain way based on your needs at the time and the future you saw for the company. Some years have passed, and now you may find yourself interested in adjusting your personal liability or simply needing to accommodate the growth of your business. Whatever the purpose, entity formation is one of the most important business law issues that a company faces.
Reasons to Change Your Business Structure
A common transition for a business is from a sole proprietorship to a limited liability company (LLC) or corporation. As a company grows from a startup into a larger enterprise, the needs and liabilities of the company grow as well. Though profits may have risen in light of the company’s growth, so have the risks that the owner carries. Additionally, capital may be difficult to raise if the business will dissolve in the event of the owner’s death. Thus, incorporating the business or forming an LLC are appealing resolutions to these issues, because they allow the company to continue its growth.
Both LLCs and corporations have their own particular advantages and disadvantages. LLCs are cheaper in terms of the tax liability, whereas it is significantly easier to attract venture capital as a corporation. LLCs are simple to start in terms of the required paperwork, but corporations give you the ability to sell stock in order raise additional capital and attract investors with an incentive stock plan. Both will result in an increase in the tax you pay on your company’s profits.
It is unusual for a company to go from a LLC to a sole proprietorship or partnership, but it is possible. Such a transition would require the permission of your partners and shareholders.
If you are considering making a change in your business structure, a Hoffman Estates lawyer can help you make the very best decision for you and your business. We stand by our work and guarantee that we will find the best solution for your business structure transition.
Contact Our Hoffman Estates Attorneys Today
Your business is our priority. No matter what the size of your enterprise, we can help you grow and flourish in an increasingly competitive marketplace. Contact our office today.