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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.
Robinson, Seiler & Anderson in Utah County Attorney can help you establish a variety of entities. If you are looking to establish a Partnership then you will want to get to know the basics of a business partnership listed below.
Sharing the Liability
Partners in a partnership are personally liable for all business debts and obligations, including court judgments. There are a few exceptions to this personal liability. Some of the partners can have limited personal liability if the partnership is set up as a limited partnership. This is a partnership in which only the general partner, who runs the business, has personal liability, while the limited partners, who are basically passive investors, can lose no more than their stake in the partnership. Owners who are concerned about personal liability can choose to incorporate their business or operate as a limited liability company. LLC’s are a great option when it comes to the protection of the each of the partner’s assets.
Creating a Partnership
Creating a partnership is easy enough to start. The first step is to agree to be partners. The next is to complete the proper registration with the state and IRS. While the owners of a partnership are not legally required to have a written partnership agreement, it makes good sense to put the details of ownership, including the partners' rights and responsibilities and their share of profits, into a written agreement.
Ending a Partnership
If you or your partner chooses to dissolve the business, each of the partners must fulfill any remaining business obligations, pay off all debts and divide any assets and profits among themselves. If you want to prevent this kind of ending for your business, you should create a buy-sell agreement, or buyout agreement, which can be included as part of your partnership agreement. A buy-sell/buyout agreement helps partners decide and plan for what will happen when one partner retires, dies, becomes disabled or leaves the partnership to pursue other interests.
For more information regarding partnerships and how to set it up properly then you will want to consult with one of the experienced attorneys at Robinson, Seiler & Anderson in Utah County. Call us today to schedule a consultation.