Omni Law Group, LLP

One big question every business owner needs to answer when starting a company is what type of entity to form: a sole proprietorship, corporation, limited liability company or something else entirely? To make the best decision, it helps to understand what each of these terms means:

Sole Proprietorships – Operated by one individual, a sole proprietorship is easy and inexpensive to set up and doesn’t have to keep as many records for the various governmental agencies when compared to other types of businesses. Sole proprietors control the company’s finances and profits by themselves, which also makes taxes easier as they’re simply included on their personal income tax forms. Unfortunately this also means the sole proprietor is personally liable for the business’ debts and the IRS can declare the company a hobby rather than a business, which has negative tax consequences. Sole proprietors often have more trouble raising startup capital than other entities as well. Continue reading »