There are multiple choices a Maryland business owner will have to make as he or she sets up a company. There is much more involved with this process BEYOND having a great business idea, and one important step is deciding on the best structure for the business. The choice of business entity is important as it can have a long-term impact on how the business operates going forward.
Options for business entities
A business entity is based on several factors specific to the company’s operations, and it can affect how the company is taxed and the personal liability of the business owner. Some of the most common options for business entities include the following:
- Sole proprietorship – This is run by an individual or a married couple who oversees all aspects of operations. The sole proprietor is personally liable for all business-related debts.
- Partnership – This is for a business run by two or more people. Each owner is personally liable for business debts and liabilities.
- Limited liability company – This offers an owner some protection from personal liability, and owners can choose how they want their business taxed.
It may help a Maryland business owner to have a complete explanation of the potential benefits and drawbacks of each choice before deciding on an entity.
Knowledge and experience matters
A business owner does not have to make important decisions, such as the choice of a business entity, alone. It will be beneficial to have knowledgeable guidance at every step. This support and counsel can be found by securing the help of a business law attorney.