If you are looking to start up a company in Orange County, Mortensen &
Reinheimer, PC has the knowledge and experience to guide you through the
legal process of forming an entity such as a partnership, limited liability
company (LLC), or a corporation. Each area has a unique set of rules and
regulations when it comes to formation and operation. When you are at
the starting line for setting up a company, business or corporation, you
want to make sure that everything has been covered and that you are heading
in the right direction for you and your future aspirations. Simply beginning
this process is exciting, but it can also be daunting; Mortensen &
Reinheimer, PC will work with you side by side to ensure that you have
covered every base in the process and ensure that each stage is handled
with clear and concise representation. Mortensen & Reinheimer, PC
will help you decide which entity is the best for your business or company's
needs. Call our experienced attorneys to get representation that starts
with YOU in mind.
For sole proprietorships, you will be the one and only owner of your business.
You will therefore have your company's income listed on your personal
income tax. If there are any losses, you will be solely responsible for
any debt and other damages that result. This process is generally simpler
since you do not have to fill out any paperwork or register with the state,
however, there are major risks with respect to personal liability. The
process can become more complex when other partners are involved or when
you desire to set up an LLC or corporation.
Partnerships involve another co-owner of your business. Your business'
income will still be reported on your personal income tax report, but
you and your partner will both be responsible for any liabilities of debts.
These partnerships can be limited, in which general partners work with
limited partners in business ventures for profit, or they can be in general
partnerships, in which the general partners control the business operations.
General partners have more control, but also more liability, whereas limited
partners have limited liability but minimum control.
Limited Liability Companies
Liability is a large concern for many who are looking to start a business.
If this is true for you, then a limited liability company or LLC may be
the best option for you. This type of company combines the features of
a partnership with the features of a corporation. Owners of an LLC are
protected from business debts or obligations, which prevents creditors
from pursuing the owner's personal finances and assets when collecting
on a debt. Owners of LLCs do not report their business' expenses,
debts, or losses on their personal income tax report; instead, they fill
out an income tax return known as Form 1065 for the IRS. The process of
starting an LLC is relatively short, but it requires several detailed
and important steps.
This type of business is a completely separate entity and is, therefore
a more complicated process. The upside to a corporation is that its owners
have little to no liability should the business suffer debts. Additionally,
corporations have their own tax identification numbers for paying their
own taxes instead of the taxes showing up on the owner's personal
tax report. Owners must only report the income they draw from the corporation
for management and other services rendered to the company.