Whether you’re starting a new enterprise or revisiting the current organization of your existing company, it’s important to know the types of business formations available under the law. While you should consult with an Oklahoma business formation attorney for the specifics of your situation, the Secretary of State’s Office does provide some useful information related to business organizations.
Types of Business Organizations
Sole Proprietorship: This business arrangement involves one person or a married couple as company owners, and it’s among the most common organizational type. The advantages are a great amount of flexibility and fewer legal restrictions on structure. The downside is that business owners may be personally responsible for debts and liabilities of the company.
Partnerships: When two or more people contribute money, property, and/or effort to an enterprise, they form a business partnership. Each stakeholder enjoys profits, losses, and management of the business according to his or her ownership interest. A limited partnership is a specific kind of organization where limited members share profits, but are not usually involved with daily business operations. Like a sole proprietorship, general and limited partners can be personally liable for debts incurred by the company.
Corporations: A corporation is an official legal entity registered with the Oklahoma Secretary of State’s Office, so it has special rights, privileges, and liabilities recognized by law. A business organized as a corporation may have certain tax and financial benefits, but there are legal restrictions that limit personal control. Owners of a corporation are generally not personally liable for debts or liabilities of the company, but there may be special circumstances in the event of misconduct.
Limited Liability Company: An LLC is formed by one or more individuals that register the company with the Secretary of State’s Office, and their rights and responsibilities are established by a special written agreement. This agreement dictates the relationships between and among the members, and provides for the distribution of profits and losses. Like a corporation, members can limit their personal liability for debts of the LLC.
We Are Here To Help
Your choice of business entity type is an important one that involves weighing such factors as liability and taxation, in addition to reviewing the specific needs of your company. An Oklahoma business formation lawyer can consult with you and help you determine which is the best fit for your circumstances. For more information on different business organization types, please contact the Law Offices of Robert R. Robles at (405) 232-7980.