Starting a New Company: Who, What, When & Where?
Sometimes the answers to these questions will affect the type of
company structure you choose.
Who will own and manage the
company?
| I
want to be the sole owner with no one else involved in
management or control. |
Consider
starting a limited liability company or sole
proprietorship. Corporations, voluntary
associations, and all types of partnerships require more
than one person be involved in governance. |
| A
friend and I will share equally in the ownership and
management. |
Your
best choices may be a general partnership, limited
liability company, limited liability partnership or
voluntary association. You could also form a
corporation, with one serving as president and the other
as secretary. |
| We
have several people who will contribute in different ways,
some with money, some with work. |
When
a number of people are involved, sometimes a more formal
structure and agreement helps clarify who has what
rights. A corporation offers the most structured
arrangement for investors, but other types can be
considered. |
What kind of organization do you
want?
| I
want a simple structure that doesn't require a lot of
filings and written documents. |
Sole
proprietorships, partnerships and limited liability
companies can be simple and require few written
documents. But be careful! Don't do without
the important agreements to keep your company on a sound
basis. |
| We
want to start a nonprofit organization to help solve
problems in our community. |
Only
three business types may be nonprofit: corporations,
voluntary associations and unincorporated nonprofit
associations. Only the nonprofit corporation is
eligible for tax-exempt status with the IRS. |
| We
want a company that can expand as our products catch on
and we can attract new investments. |
A
corporation is the most traditional structure used when
investment and expansion is in the future. It is the
only type that can sell stock, although other types such
as limited partnerships are also used to involve
investors. |
When will the company start and
end?
| My
company will just be for me to run as long as I
want. |
Sole
proprietorships and limited liability companies can be
started without difficulty and ended by filing a single
termination form. Other company types require the
agreement of others to close operations. |
| We
want to start a company that will continue even after we
retire. |
All
companies can be sold or change ownership. With a
corporation or partnership, sometimes one person's
interest may be sold. This is simplest with a
corporation, where an owner could sell stock. |
Where will the office be
located?
| Our
company is just organized to own property. We don't
want to have an office anywhere in West Virginia, just a
post office box. |
Limited
liability companies are required to have a designated
office in West Virginia. Limited partnerships and
limited liability partnerships must have a registered
office in the state. These types of offices don't
have to be places of businesses, but they must be physical
locations. |
|
