1. There Are Many Advantages to Formal a Corporation
One of the main reasons businesses form corporations is to avoid personal liability of corporate obligations. When a business has been properly incorporated in accordance to their state laws, the business owners are provided a “corporate veil", this means that they may use the corporation as a shield. Their personal assets will be protected and will generally not be used to pay corporate debts or liabilities. Another advantage to forming a corporation is the tax advantages associated with it. A business law attorney will help explain the benefits further.
2. A Limited Liability Company (LLC) Must Be Formed in Accordance With State Law Requirements
In order to obtain all of the benefits of a limited liability company, it is important that your LLC be properly formed in accordance with all of the requirements of your state laws. Generally, you must first pick a name for your business, you must then prepare your Articles of Organization for the LLC, and most importantly, you must file with the Secretary of State’s office in order to become an official LLC. A business law attorney from your state may assist you with this process.
3. Your Businesses Name Must Be Legal
If you choose to form a partnership you must include the partners’ names in the business name, or if it doesn't, you should register a fictitious or assumed business name. On the other hand, if you choose to form a corporation most states require you to include “Inc.” - Incorporated or "Corp." - Corporation in your name. In the same way, limited liability companies require the business to include LLC or Limited Liability Company in the business name. The motivation behind these requirements is to keep customers notified regarding who they are dealing with. For example, if a business is a Limited Liability Company but fails to notify its customers of their status, the business owners may be held personally liable in the event that the customer sues them.
Keep in mind, if you are experiencing any business related issues and need assistance, you may want to consider hiring a business law attorney to help with your concerns.
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Hope this information was helpful!
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