What stucture should I go with when starting my business?
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What stucture should I go with when starting my business?
I want to start a fitness training company with future of adding apparel, coaching,
training, and gym. Under my brand name.
Asked on June 26, 2018 under Business Law, Texas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
A limited liability company or LLC:
1) You want an LLC or corporation to protect you from personal liabilty for business debts or lawsuits: without an LLC or corporation, if your "business" violates a contract or lease, or if someone is injured by or during your training, *you* are personally liable, but with an LLC or corporation, only the business, and not you personally, are liable or would have to pay any debts or judgments. Having an LLC or corporation protects your house, your car, your savings, etc.
2) To avoid "double taxation" (profits being taxed once at the busienss level, then again when you take them out of the company), you want "pass through" or "disregarded" entity--that means a subchapter-S corporation or an LLC where you elect "disregarded" or "partnership" tax treatment.
3) An LLC involves somewhat less paperwork and formalities than a corporation, even a subhchapter-S corporation--it is preferably for sole owners or small businesses for that reason.
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