Are you incorporated?
Businesses need a limited liability entity, such as a corporation, LLC, or LLP. Without a limited liability entity, your personal assets could be at risk.
For example, let’s say you operate a restaurant, and a patron slips and falls and is severely injured. Even if the claim wasn’t your fault, you could still be sued. Insurance may cover some of this liability, but if the insurance policy is not adequate enough to pay it, or there is a coverage issue (or a missed payment), and the business can’t pay what is owed, your personal assets could be taken if you are not incorporated, such as your house, your bank account, etc.
Getting limited liability helps make sure your business problem doesn’t become a personal problem. The first step is to hire a San Jose corporate attorney.
Protecting And Growing Your Business
Everyone thinks that their business is protected, but any business can be sued. After all, if businesses could prevent being sued, don’t you think the tobacco companies, Wal-Mart, or Microsoft would have figured it out by now? Call Nick Heimlich for more information regarding the importance of corporate insurance in San Jose
Being incorporated could make the difference between a lawsuit averaging out to something like a standard surgery or a heart attack. Neither are pleasant, but one is much better than the other.
There are many typical entities you can choose from: a C corporation, an S corporation, a limited liability company (LLC), or a limited liability partnership (LLP). While each type of entity can provide owners with limited liability for business obligations and debts, there are certain differences to be aware of.
- C Corporation This corporate structure is the most common entity. C-Corporations are taxed at two levels, the entity level and for any distributions or payroll, etc. This is also called double taxation.
- S Corporation If you are a relatively small business, you may consider incorporating it as an S corporation. An S corporation is a corporation where profits are taxed mainly at the personal level although there is a tax at the entity level, but it is much lower than the tax rate for a C Corporation.
- Limited Liability Company LLCs are not subject to all of the corporate formalities required of corporations.
- Limited Liability Partnership Limited liability partnerships are often used for professionals such as law firms or accounting firms and have mostly limited partners and generally 1 general partner who has unlimited liability. Often that General Partner is a corporation or LLC, which limits the liability further.
Corporate law varies by state, learn where is the best state for your company to incorporate in.
Ready To Protect Your Business?
Get a reliable and substantial operating agreement in place and protect yourself from creditors, bankruptcy, and taxes. Planning and finding the most cost-effective and efficient measures for your business is what we are trained and experienced to do.