Professional Associations vs. Limited Liability Companies
When forming a business and figuring out all of the legalities involved you will need to have some knowledge pertaining to the different types of entities you can form and how each on works differently. Talking to an attorney at Robinson, Seiler & Anderson in Utah County will help you to decide which entity set-up would work best for you and your situation. To shed a little light on Professional Associations vs. Limited Liability Companies we have provided some of the basics of each for you below.
A PA is a professional entity formed for the purpose of providing a professional service. Typically, the people who own and govern the PA must be licensed in the profession in which the business is engaged. Some states limit the availability of this business entity to very specific professions, such as medical doctors, veterinarians and architects. Similar to Corporations, some state require that you have a board of directors in place and the entity itself will be formed to outlive its members.
Limited Liability Company
An LLC is a more common and flexible business entity that is not restricted to any specific profession. In an LLC, the owners are not personally liable for the debts of the business, much like a corporation. LLC’s also don’t require a board of directors. Income for an LLC "passes through" to the owners, meaning that there is no corporate tax, and the income is taxed only once. You can choose to have either a single-member LLC or a multi-member LLC. It all depends on how you want to divide your ownership and assets.
Start the Process
Now that you have an idea of what kind of business entity you will need to form for your business needs you can begin the formation process. The first step is to contact the attorneys at Robinson, Seiler & Anderson in Utah County. They can walk you through the structure you need and help you with putting together the necessary paperwork needed for each state. Call us today to schedule a consultation so we can help you get the process started.