At the Law Office of Jace C. McColley, LLC, we love it when our neighbors become our clients, and we can assist them in forming their business enterprises. By sitting down and learning what our clients’ goals and plans are, we can determine the best business formation that will help them achieve their objectives. Some of the most common business types are listed below.
Limited Liability Companies
Limited liability companies (LLCs) are a popular New Jersey business formation type. It is a company that combines the characteristics of a partnership and a corporation. An LLC provides owners of the company personal liability protection from debts of the company. It also provides tax advantages at the business level. Owners are required to file a Certificate of Formation.
Sole Proprietorship
A sole proprietorship is a basic setup where one person owns the company and is responsible for its assets and liabilities. Profit and loss are reported on the owner’s personal tax return. While sole proprietorships are the most simple business form to establish, they do not offer the owner any personal liability protection from business debts.
General Partnership
In a general partnership, the business is owned by more than one person. The owners are partners, and they are responsible for the partnership’s obligations, debts, and assets. This entity type is straightforward to create but fails to offer the partners any personal protection from the debts of the business.
Non-Profit Corporations
A non-profit corporation is organized for a purpose other than to produce income. Typically, it is formed to accomplish a common good. The reason the non-profit is formed may be religious, educational, charitable, or another suitable purpose. They do not have shareholders or issue stock. Grants and donors typically fund them.
501(c)(3) Designation
Charitable organizations may apply for tax-exempt status under section 501(c)(3) of the Internal Revenue Code. When an organization has a 501(c)(3) designation, any contributions made by donors are tax-deductible to the donor.
Corporations
When a business is formed as a corporation in New Jersey, it is an entity separate from its owners. This provides the owners with personal protection from the debts and liabilities of the corporation. Corporations are able to sue and to be sued and can also issue stocks. Owners must file Articles of Incorporation and By-Laws, hold meetings, and file reports.
Joint Ventures
A joint venture is when one or more individuals or companies decide to join forces for a specific purpose. All parties wish to remain independent but also want to work together towards a common goal. Joint ventures require that the parties execute a contract spelling out the responsibilities of each party and their relationship to one another.
Business Planning & Formation at the Law Office of Jace C. McColley, LLC
Your business is important to you, which makes it important to us. Schedule a consultation so that we can meet and develop a plan to set your business up for success.