Starting a business can be a big endeavor for a Danville resident and it is important that they open their new entity with the best possible business plan in place. Business planning can begin even before a person knows exactly what their business will achieve and should involve a careful assessment of the business structures they may implement before they open their entities’ doors.
A business can be structured as a sole proprietorship, which means that it is owned and run by one person. There is generally little to no paperwork involved in setting up a sole proprietorship, which can sound like a benefit to many; however, from a legal standpoint, a sole proprietorship is tied to its owner and, therefore, the owner is liable for any debts or judgments incurred by the business.
A partnership is like a sole proprietorship except that it is owned by more than one person. A limited partnership is more complex and involves ownership by multiple different people at two different levels of involvement: general and limited. While general partners may function like partners in a non-limited partnership, limited partners carry no liability for the business’s debts or losses.
A corporation is a good option for individuals who may want to insulate themselves from the liability that their business may incur. They are more complex to establish but have their own benefits to business owners that should be discussed with business law attorneys prior to establishing business structures.
These are only some of the business structures that Kentucky residents can use to set up their new entities. Readers are reminded that this post should not be read as legal guidance or advice and it does not advocate for any one form of business over others.
Disclaimer: The information in this blog post (“post”) is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from Sheehan Barnett Dean Pennington Little & Dexter, PSC or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.