Sole proprietorships are the simplest type of business structure. A sole proprietorship means that you own and run the business on your own. Legally speaking, there is also no difference between you and your business. This can present significant liability exposure to you personally. Not only are the assets of your business exposed, but your personal assets may be seized if you were sued and lost a lawsuit. At Beth Santilli Law, we can help you determine the best structure for your business to protect your personal assets by keeping them separate from your business.

An LLC, or limited liability company, is a type of business structure that allows you to be taxed as a sole proprietor, partnership, or corporation. Although an LLC is not a corporation, it does provide the protection of limited liability for the owners of the business. You can own an LLC on your own or have an unlimited number of members within the LLC. Whichever you choose, you and all other members are protected from being held personally liable if the company accrues significant debt or runs into legal issues as long as certain criteria is met.

S corporations have certain tax considerations that sole proprietorships and LLCs do not. The owners of these corporations are shareholders, and each shareholder has their own tax rates. This can result in significant tax savings, as each shareholder reports their earnings on their own tax returns. Owners of an LLC can also request S corporation status from the IRS to experience all of the same tax benefits.

Unlike S corporations, owners of C corporations are taxed separately from the business. This is because C corporations are considered entirely separate from the owners, which means that owners are also protected from liability in regards to debt and legal issues. C corporations also typically have stock options, which can help to attract new employees, particularly when the business is just starting and there is not much money available for big salaries.

Business partnerships are a legal relationship formed by two or more people that have entered into a partnership agreement to run a business. The major benefit of a partnership is that it allows the partners to combine their expertise and knowledge as well as the funding they have available for the business. Partners may also reap tax benefits, as they can sometimes deduct business losses from their personal tax returns. With a partnership, it benefits the partners to set up the business as a corporation or an LLC for the liability protection of those entities.

Many businesses require licenses and permits before they can begin operation. South Carolina does not require all businesses to obtain a license but certain cities still require it, including Mt. Pleasant. Certain businesses still require a license, even if they do not live in a city that requires them. For example, retail businesses must register for a retail license with the South Carolina Department of Revenue.

Additionally, certain professionals are required to have a license before opening a business, such as massage therapists and barbers. Although not a business license, it is still a license required to operate in the state.

Governance documents are important for any business, as they dictate how the business should be run, particularly when a dispute arises. Bylaws are very common among corporations, as they contain provisions for the meeting of shareholders, meeting of directors, and more. Partnership agreements are typically contracts that outline the rights and responsibilities of each partner in the business. Policies and procedures, as well as operating agreements, also help govern how the business should be run and are helpful when there is a dispute among any two or more people within the business.