An overview of business structures
Deciding when to undergo business incorporation and which type of entity to form is an important step for business owners looking to grow a company. Corporations and limited liability companies are two well-known forms of business. The eCommerce Times offers some insight into the origins of these business structures as well as information about why they remain solid entities.
The source quotes the late Chief Justice Marshall as defining a corporation as “an artificial being, invisible, intangible, and existing only in contemplation of the law.” Corporations were originally intended to separate a business owner from the debts of a company – a purpose they still serve. Corporations have been popular since their inception.
LLCs, on the other hand, have become popular just in the past 15 years. The eCommerce Times says limited liability firms are something between sole proprietorships and corporations. The source calls LLCs “flexible” business entities. As its name suggests, an LLC limits the personal liability of founders and shareholders.
The source advises small business owners to do their homework on how these entities have developed, and the advantages they offer in the current economic climate before incorporating, but both offer a number of benefits to entrepreneurs.
Business owners can consult online incorporation service websites to learn more about the protection offered to business owners through these different business types. Whether filing an LLC or forming an S corporation, online incorporation services can lower the expense of these procedures so more money can be invested in developing a company.