What business structure should I use for the business Im starting?

Hello, Im in the planning phase of starting a local
drum shop. What business structure makes the most
sense for this specialized retail venture and why?

Asked on April 4, 2018 under Business Law, Florida

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

Limited liability company or LLC.
1) You want a structure that protects you from business-related debts (e.g. if the business borrows money and can't repay) and legal liability (e.g. if it violates a contract or lease and is sued): that means an LLC or corporation.
2) You want to avoid double taxation, in the form of having any profits first taxed at the corporate level, then taxed again as part of your income when you take money out of the business. That means no "C-corp." (which is the type of corporation used for big companies, like telecoms and car companies) and instead points you to "S-corps" and LLC, which are "pass through" or "disregarded" entities: any profits "pass through" the entity and are only taxed once, with owner's income.
3) An S-corp. and an LLC are very similar in effect, but an LLC involves somewhat less paperwork and record-keeping, giving it an advantage for a small business owner. 


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.