When starting up a business, you must know your options. The most common ways to organize any business is either having a sole proprietorship, partnership, corporation, profit or a nonprofit, cooperative, and so on. One of the main business structure that requires one to gain insight before startup is corporations. It’s more challenging to have a corporation structuring without the right information due to the many overlapping and ambiguous lines. Therefore it pays to consult with corporate lawyers, accountants among other important business counselors.

Factors To Consider For A Corporation Structuring

The business structure you choose influences your daily operations. Having the right structuring means that you have the right balance in any legal issue and the benefits you get. The best structure depends on three main factors:
  • The type of business you run
  • Whether you will own it or how many owners it has
  • Its financial situation
Since business needs are different, every business owner must make sure they pick up the right structure that suits their business. While forming a good business structure may seem an easy task, forming and operating a corporation is complicated and expensive. That’s why it’s advisable to seek advice from the best corporate law firm to learn the risks and liabilities involved, the income tax situation, and the like. 

Below are the most important factors to consider:

  • Investments needs: Though the cost of forming a corporation is high compared to other structures, corporations have the strongest protection for its owners. When it comes to raising capital, corporations have an advantage as they can do this through the selling of stock. In this way, they attract employees.
  • Expenses to spend in establishing or maintaining the structure: While it’s easy to form a sole proprietorship or a partnership, a corporation structuring proves to be more expensive. It’s also not easy to maintain. There is a certain amount to be paid when forming a corporation, which is different in each state. In Australia, the cost may range from $417-$506, depending on the business. A corporate lawyer can advise on the right amount needed for a corporation structuring. Another task for anyone setting up a corporation is to elect officers to run the company. In addition, they also have to maintain records of vital business decisions and follow any legal formalities.
  • Transfer of ownership: One good thing with a corporation is that you can change your mind. The choice you may is not the final. The fact is that the business structure you startup may not meet your future needs. If you start up a partnership and later decide to grow up your business or the risk of personal liability increases, you can easily convert it to a corporation.
  • Incomes taxes: Unlike other structures such as sole proprietorship, corporations pay their income tax from profits using a new single flat tax rate of 21%. Though their income is taxed twice- when they make profits and payment of dividend to shareholders, this may help them have a lower combined tax bill than those who have unincorporated businesses earning the same profits.

Setting Up A Corporation

One of the first steps required in any set up is to prepare the articles of incorporation. Your attorney can help you complete the required forms. The corporation will require a set of bylaws dictating how the corporation will run, the directors and shareholders' rights and responsibilities, or any other important details needed to run the corporation. If you fail to follow the set rules of incorporation, the court may hold you and other company shareholders responsible for debts, which may be recovered from your personal assets. That’s why one needs an expert to help choose the best ownership structure of your business. With this, you should be conversant with what laws to follow and how to keep accurate financial records, which clearly shows the separation of the owners' incomes and that of the corporation itself.

How Can A Corporate Law Firm Help Me?

Every business has its unique needs, depending on the type of corporation and the business structure involved. You cannot make a choice based on other people’s decisions. You should consider the unique needs of the business and its owners. Since this may not be an easy task for a layman, it’s advisable to seek expert advice. Getting legal advice for a corporation structuring would help as the lawyer may provide real scenarios and demonstrate how they can work for your type of corporation. This may result to a smooth and faster process. You can choose the right structure if you know the benefits and the possible risks associated with your situation. Also, you eliminate any chance of missing vital details in your state’s law. The information given helps you prepare the relevant paperwork to have a solid start.