Mesa, AZ Business Formation Lawyer Assists with Your Choice of Entity
What type of entity is most advantageous for your business?
When beginning a business, selecting the appropriate type of business entity for your new venture is an important step that comes with tax and legal liability implications. Many different options are available in Arizona, including corporations, limited liability companies, partnerships and limited liability partnerships. A qualified and experienced business attorney in Mesa can guide you to the right choice given your particular needs. The Law Firm of Joseph M. Udall, PLC has more than 20 years of experience helping businesses throughout Arizona get started on a firm foundation. We can find the solution that best sets your company up for success.
How to decide on a business structure
Our firm guides you on the specific type of business entity that best suits your commercial purposes. Your business formation options include:
- Sole proprietorship — You can start a sole proprietorship without submitting a filing to the state, but if you’re using a name besides your own for the business, it is usually a good idea to register it to avoid potential conflicts. Owners of sole proprietorships are personally liable for business debts and do not complete separate company tax returns.
- General partnership — When two or more people choose to establish a general partnership, each one is jointly and severally responsible for judgments or creditor claims brought against the business. The relationship between the owners is governed by the partnership agreement that they sign. Like sole proprietorships, earnings are reported on each partner’s individual tax return.
- Limited partnership — In a limited partnership, one general partner usually has operational control and personal liability, while the personal assets of the limited partners are protected. These entities must be registered with the Arizona Secretary of State.
- Limited liability partnerships — A limited liability partnership (LLP) gives general partners the ability to shield their personal assets from business creditors. Many businesses opt to register as LLPs because they safeguard owners’ assets but are not subject to the taxes levied on corporations.
- C-corporation — With the corporate form, officers and directors are generally shielded from personal liability for wrongful acts of the corporation. However, depending on the circumstances and type of corporation formed, corporate profits may be subject to double taxation, first as corporate income, and then again as income to the final recipient. Corporations must register with the Secretary of State and follow laws relating to corporate governance and required filings.
- S-corporation — The S corporation is an exception to the double taxation rule. With an S-corp, shareholders report the flow-through of income and losses on their individual tax returns. With a partnership, owners are taxed as individuals while being able to protect their personal assets. There are some restrictions on S-corps, so we can advise if your business qualifies.
- Limited liability company — A popular business form in Arizona today is the limited liability company (LLC). The advantages of an LLC are that it is taxed like a partnership, yet the owners are shielded from personal liability as they would be with a corporation, and unlike an S corporation, which limits the number and type of shareholders permitted, there is no limit on the number of members in an LLC.
Drawing on decades of experience and a detailed knowledge of Arizona business law, our firm will help you weigh the pros and cons of various legal entities so you can make a decision with confidence.
Why hire a business formation attorney?
Determining the best legal entity for your business can be a challenging process. Consulting with a qualified attorney will help you evaluate the factors that should be considered. Your top objective might be to guard against personal liability or avoid tax complications. There are also other potential considerations, including the number of employees you have and your plans for future growth. Fortunately, Arizona and other states have broken beyond the old framework to offer options that blend some of the best aspects of traditional corporations and partnerships. We provide practical guidance so you can understand how the legal entity you choose will affect your day-to-day operations.
Get reliable, practical advice about selecting an entity for your Arizona business
If you’re forming a new company in Arizona, the Law Firm of Joseph M. Udall, PLC is available to help. Call (480) 500-1866 or contact our Mesa office online. We provide free, first-time telephone consultations and can schedule Saturday and evening appointments for your convenience. We speak Spanish fluently.