For many residents of North Carolina, launching a business is the first step in fulfilling a lifelong dream, but if you choose the wrong business structure when doing so, you can wind up facing unnecessary financial and personal hardship. At Daughtry, Woodard, Lawrence & Starling, we understand that the type of business structure you choose to establish will have long-lasting ramifications, and we have helped many people looking to establish their own businesses pursue solutions that meet their needs.
According to QuickBooks, virtually all small business owners will face at least some level of liability, but they can limit that degree of liability by choosing certain types of business structures over others. Otherwise, you run the risk of potentially losing your personal assets in the event that someone files a successful lawsuit against your business, so figuring out how to protect yourself should be a priority for any prospective small business owner.
Typically, small business owners looking to reduce the level of personal liability they have in their businesses opt for one of two business structures: either the limited liability company or the S corporation. Both formation types can help you shield your personal assets from liability, but there are some important distinctions between them.
For example, a limited liability company is typically easier to run, and there are generally fewer compliance requirements associated with this type of business structure. An S corporation, meanwhile, tends to be a bit more complicated to operate due to stricter compliance requirements, but it also offers some perks, among them pass-through taxation. Please contact our law firm for more information about what type of business structure might best suit your needs.