What’s the right type of business entity for your company?

If you want to open a new business in Delaware, you have a few ways to achieve this goal. Before you can get started, you’ll need to determine what type of business entity to choose. While this decision might seem complicated, learning more about the multiple types of business entities should make it easier.

Limited liability company

One of the most popular ways to open a business organization is by making it a limited liability company. With this type of business, your personal and business assets remain separate. Unlike a sole proprietorship, which is fairly simple to set up, forming a limited liability company requires a few more steps. Namely, you’ll need to establish an operating agreement and articles of organization.

Sole Proprietorship

You can also form a business under a sole proprietorship. This type is simple to form; all you need is a Tax ID number. With that said, a sole proprietorship does mean that a business owner takes on quite a bit of liability. If you find your sole proprietorship involved in a business law matter, it could mean that a lot is on the line.

Partnership

Not everyone opens a business by themselves. If you’re opening a business with one or several other people, you’re entering into a business partnership. To establish this partnership, all parties involved will need to enter into a verbal or written agreement. Most companies have continuance agreements in place to help guide a business forward if a partnership ends.

As you can see, there are many ways to potentially form a business. After forming your business, it’s a good idea to prepare yourself for anything. To have help with potential future issues, consider contacting a business law attorney.