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Building a Strong Foundation Through Purposeful Entity Formation

When forming a new business, you need to decide what entity type it will be. Choosing wisely can be critical to getting your business off to a strong start.

At Daudi & Kroll, P.C., we are here to help you with this decision and the other major choices related to launching a new business endeavor. Based in Okemos and Canton, our entity formation attorneys provide Michigan entrepreneurs with personalized guidance and support. Let us help you start your business on a firm foundation.

The Basics of Partnerships

A partnership is an entity option for businesses with multiple owners (called partners). A partnership agreement can govern its operations. The individual partners are taxed, not the business itself.

The most basic kind of partnership is a general partnership. In this arrangement, all partners are liable for the business’s actions.

There can also be limited partnerships. In this structure, there are two types of partners: general and limited. General partners have the same responsibilities and liabilities as a general partnership. Limited partners, on the other hand, only contribute financially and enjoy limited liability.

Understanding Incorporation

A more complex entity choice is a corporation. The company’s articles of incorporation and bylaws govern it. It has a relatively strict management structure. Its owners (called shareholders) do not have liability for the business’s actions.

How a corporation is taxed depends on its type. In an S corporation, the individual shareholders are taxed, but the business isn’t. In a C corporation, the business is directly taxed, as are dividends paid to shareholders.

What to Know About LLCs

A limited liability company is a hybrid model that mixes elements of corporations and less complex entity types. Articles of organization and operating agreements can govern operations. Owners (often called members) have liability protection. An LLC has more flexibility in its management structure than a corporation. An LLC’s members are taxed individually, while the company as a whole is not.

Guiding You Through Entity Formation

Our team is ready to support you at every step of entity formation. We can:

  • Help you understand your entity options
  • Help you determine the right entity type for your business
  • Guide you through registration
  • Help you create governing documents
  • Assist with all other aspects of getting your chosen entity type in place

Our lawyers can also help you navigate other commercial law issues connected to starting your business.

Start Your Business with Confidence

Turn to our knowledgeable team for trusted answers and guidance on entity formation.

Connect with us today via email. You may also reach us by phone at 517-306-4538 or 734-249-6310.