Business Entities and Liability Concerns
Below, we explore several of the most common business structures and the liability considerations associated with each.
Sole Proprietorship
A sole proprietorship is operated by a single individual. It is easy to establish and cost-effective to maintain. However, there is no legal separation between the owner and the business. This means the owner is personally responsible for all business obilgations and liabilities.
Partnership
A partnership is formed when two or more individuals agree to operate a business together. There are two main types:
General Partnership (GP): All partners are actively involved in managing the business and are personally liable for the actions and debts of the partnership.
Limited Partnership (LP): Consists of at least one general partner, who manages the business and assumes full liability, and one or more limited partners, who contribute capital but do not participate in daily operations. Limited partners generally have liability protection up to the amount of their investment.
Limited Liability Company (LLC)
A Limited Liability Company (LLC) combines a flexible structure with liability protection. An LLC is a legally distinct entity from its owners. This means members are typically not personally responsible for the debts or legal claims of the business.
Corporation
A corporation is an independent legal entity that exists separately from its owners (shareholders). It can enter into contracts, own property, and continue to exist regardless of changes in ownership. There are two main types:
C Corporation
S Corporation
Corporations offer the strongest liability protection. However, they also involve more formalities.
At Shina Law, PLLC, we work closely with clients to choose the right business structure—one that protects their interests and supports their long-term goals.
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📞 Phone: 248-890-2832
📧 Email: info@shinalawpllc.com
Disclaimer: The information provided on this blog is for general informational and educational purposes only and is not intended as legal advice. Reading this blog or interacting with its content does not create an attorney-client relationship. Laws and regulations vary by jurisdiction and can change frequently. You should not act or rely on any information here without first consulting a licensed attorney in your jurisdiction regarding your specific legal needs or situation. If you have questions or need legal assistance, please contact our office directly.
