As an aspiring new business owner, you have many options to choose the structure of your company for your small business plan. Probably the best option for you, however, is to choose becoming a Limited Liability Corporation. Also known as an LLC, this designation has many advantages. The primary advantage of LLC for small business is that it affords you and your company the benefits of a partnership while also providing the "limited liability" usually enjoyed by corporations (and hence the name). After you state your intent in your small business plan, the existence of an LLC starts when you file the articles of organization with your state's Secretary of State.
A requirement that you won't be able to get around, however, is bringing in another member, designated in your small business plan. LLCs require at least two owners, but a major benefit is that the LLC is treated as a completely separate legal entity from the partner-owners. This confers great benefits, distancing you and your partner from shouldering any debts incurred by the company. However, either owner will liable for any and all debts of your company if a court sets an "alter ego" doctrine upon you. This legal terms simply means that a court can hold you liable if it determines that your company is simply an "alter ego" of you and your partner.
You can also be held liable if you or your partner-owner have personally guaranteed the obligations of your business. So be sure that you're clear about the designation in your business plan.
Another major benefit of structuring your company as an LLC is that members of the company have to be voted in by the owners; therefore, no one can be foisted upon you without your say-so. Also, up until recently, an LLC had to specify a date for termination; nowadays, LLC can exist in perpetuity in many states. Generally, though, an LLC's existence dissolves with the death, resignation, expulsion, bankruptcy, etc., of one member. To avoid this, a majority of capital interests and profits must vote to continue the LLC within 90 days. Ensure that you include a paragraph about this in your small business plan. All in all, an LLC is a great choice for your small business.
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