Choosing the legal structure of your business – The first step to success
When establishing a new business, the most important step is to decide what structure it will have. On this will depend your liability as an owner, liability over business debts, record keeping and taxation laws. Because the process is a complicated one, many prefer hiring an attorney for advice. But their opinion still weights a lot. Because many are unfamiliar with these notions, we have a small guide that outlines the main differences there are.
If the idea of starte AS is appealing to you, you must know that many business owners tend to turn their attention to this type of business establishment more and more. This happens because it allows the owner to take what’s best from a corporation and a partnership and put them into their advantage. The main advantage is that both profits and losses can pass through to owner without being a subject to taxation laws. The business will not be taxed, while the owner will be protected from personal liability.
A Sole Proprietorship
Of course, a single business owner legally owns a sole proprietorship. However, Starte enkeltmannsforetak implies some risk and expenses from the owner. They will be legally responsible for the company and they will be using their own expenses for it. This means full legal and the financial liability. On the other hand, it offers full managerial flexibility for the owner. This is the main reason why this is one of the most common business structure.
A partnership is a type of business establishment in which two or more individuals agree to share the profits and risks of a business. The main disadvantage of this type of establishment is financial liability, each participant being responsible for the financial duties they have on the business. However, from the profits’ point of view, this is a great business structure, since all the profits can be passed to the partners without being a subject of any taxation laws.
If Opprette AS doesn’t tickle your fancy, you might want to consider starting a company. The great thing about starting a corporation is the fact that it becomes a completely separate entity from those who established it. Financially and legally, it is responsible for the actions it takes and it is taxed and legally liable for the processes taking place in its name. Considerably more expensive than the other legal entities, it also has a much complicated mechanism in bookkeeping.
Regardless of your go-to structure, make sure you get in touch with an attorney and discuss with them the advantages and disadvantages of each type. Also, make sure the proposal fits your necessities. Otherwise, you will face issues you don’t necessarily need. Make sure you a throughout the market research and find out the most appropriate solution for you. You will be surprised by the multitude of options, but with a little research, you will be able to make the right decision.