PLANNING YOUR BUSINESS STRUCTURE

Starting a new business involves careful decision-making and thorough planning to ensure that your operation will remain a viable, successful, thriving business One of the first steps in establishing a business is determining the appropriate structure, which will affect taxation, legal and financial liability, and decision-making authority There are three basic types of business models:

Sole proprietorship

A sole proprietor is someone who owns an unincorporated business by himself or herself However, if you are the sole member of a domestic limited liability company (LLC) you are not a sole proprietor if you elect to treat the LLC as a corporation

Partnership

A partnership is a for-profit business organization comprised of two or more persons. State laws govern partnerships. Under various state laws, "persons" can include individuals, groups of individuals, companies, and corporations. Partnerships vary in complexity.

Corporation

A corporation is a business entity that is owned by its shareholder(s), who elect a board of directors to oversee the organization's activities The corporation is liable for the actions and finances of the businessthe shareholders are not

Which is the appropriate type for your new business? You may wish to consult an attorney or an accountant for assistance For more information on how to choose a legal structure, visit the North Carolina Secretary of State

North Carolina Secretary of State sosnc gov | 919-814-5400