Choosing a legal structure for your New York business will be among the most important decisions that you’ll make as an entrepreneur. If you plan to run the company on your own, the business will likely be labeled as a sole proprietorship by default. If the company has two members, it will typically be labeled a partnership by default.
What if you’re not happy with the default business structure?
In most states, you can organize your company as a limited liability company or corporation even if you serve as its only owner. The main benefit to operating as an LLC or corporation is that the company becomes its own entity. Therefore, only its assets can be seized if your business is sued or runs into other types of legal trouble. To do so, you will need to file paperwork with the appropriate state authorities.
What else should you consider before choosing a business structure?
Generally speaking, an LLC or corporate structure provides you with greater protection from liability when compared to operating as a sole proprietor. However, operating as a sole proprietor may be more convenient for those who don’t want to spend a lot of time or money on accounting or other other administrative tasks. It may also be easier from a business law perspective to operate as a sole proprietor as opposed to a corporation or similar type of entity.
As a business owner, it’s important to structure your company in a manner that allows it to operate as efficiently as possible. If you have business partners, it’s a good idea to consult with them when deciding how the organization will be run now and in the future.