How do you know which business structure is best for your small business—sole proprietorship, corporation, or LLC? On today’s Small Business Show, we’re pleased to welcome Ana Juneja, Managing partner of Ana Law, to explain how to form a small business entity and what you need to know about your small business’s legal framework.
About the firm
Ana Law, a firm that specializes in trademarks and brand protection, has revealed that its founder, Ana Juneja, has risen to the position of No. 1 trademark attorney on social media. With the milestone, the company declares that it will proceed with the next stage of its social media outreach, which will integrate additional platforms like TikTok and podcasts.
Back to the basics:
Simply said, the structure of the company constitutes its business entity, even if it doesn’t legally have any documentation. For instance, if you operated as a sole proprietor without a limited liability company (LLC) or corporation, you would be regarded by the law as an unfavorable entity. Juneja notes, “whether you were selling goods or services to the public, making $5 or $500, you’re still held to the standards of a business owner by the courts.” She adds that obtaining an LLC is an easy way to protect yourself and your business.
Establish your firm as a separate entity from yourself by following a few simple steps. Which helps to isolate your finances and liabilities from the company’s assets. When it comes to small business startups, Juneja cautions everyone to always be overly cautious. The consequences could wreck you forever, she adds, “even though there is only a 1% possibility of a complete devastation happening.”
- An LLC is a formal entity that is by far the most prevalent, and it is very easy to create one in the United States. The platform offers protection while being reasonably simple to set up, making it a great asset with tangible value for your business.
- A corporation is more formal that allows for venture capital (VC) funding, which is recommended to obtain in a favorable business state like Delaware, Wyoming, or Nevada for the sole purpose of dividing up shares.
- A PC Professional Corporation, commonly referred to as a professional limited liability business, is a different entity type that is used by licensed professionals such as accountants, attorneys, and doctors. This entity is different in every state.
Overall, Juneja adds that “an S company is not a sort of business, but a tax choice.” For instance, if your LLC generates enough revenue to qualify for S-corp status, it will be categorized as an S-Corp.