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Your small business lawyer for DBA, LLC, Corporation, and Non-Profit formations, contracts, and administration in the Albany, Schenectady, Troy, Clifton Park, and Saratoga area.

With very competitive pricing and fast quotes, contact an attorney at Gold Law Firm today.

Business Formations

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When you first start a business, there are a lot of things to decide. Where do you open, what should the name should be, writing a business plan…but one of the first decisions you should make is what form your business should take.

Here are your options:

Business Corporation

  • Personal liability is limited, for shareholders.

  • The life-span of the business is perpetual; unless otherwise designated in the Certificate of Incorporation,

  • A corporation pays state franchise taxes and taxes on income; shareholders pay taxes on income distributed as dividends (a limited exception exists for “Subchapter S” corporations)

Not-for-Profit Corporation

  • Personal liability is limited, for members.

  • The life-span of the business is perpetual; unless otherwise designated in the Certificate of Incorporation.

  • A not-for-profit corporation is not automatically exempt from federal and state taxes. To qualify for tax exemption status under the state and federal tax codes, applications must be made to the Internal Revenue Service and the NYS Department of Taxation and Finance.

Limited Liability Company

  • Personal liability is limited, for members.

  • The life-span of the business may be designated in the Articles of Organization; OR until a listed dissolution event occurs and the company takes no action to continue.

  • An LLC can elect its classification for federal tax purposes. An LLC with two or more members can elect to be an association (corporation) or a partnership; an LLC with one member can elect to be an association (corporation) or elect to be disregarded as an entity separate from its owners (in effect, to be treated as a sole proprietorship for federal tax purposes.)

  • If you and/or the other partners are professionals authorized by law to render a professional service in New York, you may be able to set up a PLLC. (For a list of those professions, click here.)

General Partnership

  • Personal liability is joint and individual for the general partners who are responsible for the obligations of the partnership.

  • The life-span of the business may be designated in the partnership agreement; or until a dissolution event occurs.

  • A general partnership is not treated as a separate taxable entity; business income is taxed through each general partner’s personal tax return.

Limited Partnership

  • The life-span of the business may be designated in the Certificate of Limited Partnership; or until a dissolution event occurs, subject to any right to continue that may be stated in the partnership agreement.

  • Personal liability is joint and individual for the general partner(s) who are responsible for the obligations of the partnership; limited partner(s) are liable to the extent of their capital contributions to the partnership.

  • A limited partnership is not treated as a separate taxable entity; business income is taxed through each partner’s personal tax return.

  • If each of the partners is a professional authorized by law to render a professional service in New York, you may be able to set up a LLP.  (For a list of those professions, click here.)

Sole Proprietorship

  • If you are operating under a name other than your own, you must file with the clerk of the county(ies) in which the business is conducted.

  • Personal liability is full- a sole proprietor is personally responsible for all debts of his or her business.

  • The life-span of the business is determined by the individual (ceasing on death of the sole proprietor).

  • Business income is reported and taxed through the sole proprietor’s personal tax return.

Such decisions are weighty and can incur tax liabilities that you may not be aware of, so aside from the legal issues involved you may want to engage a CPA to help decide what may be the best form for your personal financial situation.

Remember, Gold Law Firm is here to help you with your plans.

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