Wilmington Business Formation Lawyer
As a business owner, setting a good foundation for your business will save you a lot of money and legal trouble in the future. At Johnson Legal, we help you as a business owner navigate the right formation structure for your business and equip you with the tools needed for success.
What is a Sole Proprietorship?
A Sole Proprietorship (SP) is a non-registered, unincorporated business run solely by one individual proprietor with no distinction between the business and the owner. The owner of a sole proprietorship is entitled to all profits but is also responsible for the business’s debts, losses, and liabilities.
What is an LLC?
A Limited Liability Company (LLC) is simple to create and offers flexibility and security. It provides personal liability protection for owners (known as members), similar to a corporation. Yet, it allows the operational flexibility of a partnership. This means if the LLC faces a lawsuit or debt, your personal assets remain safe – but only if your LLC is properly formed and operated.
What is a Corporation?
A corporation is a legal entity that is separate and distinct from its owners and is established to conduct business or trade. It files tax returns with the Internal Revenue Service (IRS). A corporation, sometimes called a C corp, is a legal entity that’s separate from its owners. Corporations can make a profit, be taxed, and can be held legally liable.
Corporations offer the strongest protection to its owners from personal liability, but the cost to form a corporation is higher than other structures. Corporations also require more extensive record-keeping, operational processes, and reporting.
Unlike sole proprietors, partnerships, and LLCs, corporations pay income tax on their profits. In some cases, corporate profits are taxed twice — first, when the company makes a profit, and again when dividends are paid to shareholders on their personal tax returns.
An S corporation, sometimes called an S corp, is a special type of corporation that’s designed to avoid the double taxation drawback of regular C corps. S corps allow profits, and some losses, to be passed through directly to owners’ personal income without ever being subject to corporate tax rates.
Why You Need a Lawyer to Form a Business?
While the process to start a business may seem straightforward, there are nuances and legal complexities that can significantly impact your business.
A lawyer can offer personalized guidance on critical decisions such as drafting your operating agreement and designating a registered agent. They can also ensure your business complies with all federal and North Carolina-specific regulations. (While we assist with entity formation and startup compliance, we do not draft sales or purchase agreements related to business or real estate transactions.)
Perhaps most importantly, having a lawyer involved from the outset helps mitigate potential legal problems down the road. At Johnson Legal, we use our experience to make the business formation process smooth and stress-free for our clients, ensuring they’re positioned for success from day one.
Contact Johnson Legal Today
If you’re ready to turn your business idea into a reality, don’t navigate the complexities of business formation alone. Let our firm be your trusted partner through the process.
Call us at (910) 319-7373 or contact us online today to speak with a knowledgeable Wilmington business formation advisor.
