People who are getting started in the construction industry or want to explore the option of changing their existing business structure might want to start with the basics. The different advantages and disadvantages of the common types of corporations, limited liability companies, partnerships and sole proprietorships are many, and deciding which business structure suits the company’s needs is an immensely complex question.
People need to consider how much time and how many resources they want to put into creating and staying on top of the demands of their respective business structure. There are also tax advantages and disadvantages that need to be considered in order for a business startup to optimize their financial success.
Any person can go online and complete and file their own business formation documents, but people who aren’t experienced with California business formation and the laws and regulations this subject entails should be careful not to make mistakes before their entrepreneurial dream even begins.
New businesses with a simple structure and few investors or partners might benefit from an equally simple business structure. While it may not be the best choice for potential long-term growth, a limited liability partnership or company may suit the needs of most startup companies who want to preserve their own personal assets from liability.
Startups with multiple employees and multiple investors will probably want to take a look at incorporating. Creating articles of incorporation can be done hastily, but rushing through this step could severely handicap the corporation down the road. Articles of incorporation become and remain an integral part of the business’ framework, including granting of various powers, voting rights and the issuance of stock.
New business owners and others considering a change should contact an experienced California construction attorney for more information.
Source: California Secretary of State, “FAQ,” accessed May 11, 2015