Turing your passion into a profession or finding a business opportunity to act on is just the first step in getting your new business off the ground in Washington State. After identifying your business opportunity, you will need to take a number of different actions to get your business from the idea phase to a place where it is generating revenue. One of the first steps you must take is deciding what kind of business entity you want to form.
Selecting the right kind of business entity for your endeavor can be confusing, but the business attorneys at Leavy Schultz Davis are happy to help you understand your options and select the best choice for your business.
Business Entities in Washington
In Washington State business owners can choose from 6 different entity types:
- Sole Proprietorships
- General Partnerships
- Limited Partnerships
- Limited Liability Partnerships
- Limited Liability Companies
Each of these different entity types offers a variety of potential benefits and drawbacks. They have different filing requirements, vary in how difficult they are to actually form and the entity you select will have an impact on:
Liability – Liability is a legal term that is more or less synonymous with responsibility. The business entity type you select may provide you with some personal protection against debts and expenses incurred by the business if things don’t go as planned.
Day to Day Business Operations – The type of business you choose to form can also impact the day to day operation of the business. Selecting the right entity type, that properly reflects the level of control and support you need in your business is an important piece to consider.
Taxes – The business entity you select will also impact how state and federal taxes are handled for your business. In a sole proprietorship, for example, income generated by the business is passed through to the business entity and taxed on the owner’s personal tax return. On the other hand, in a corporation, the business entity is taxed on the profits earned and the owners are taxed on the income they personally receive through the business.
Changing Business Entities in Washington State
Sometimes, as a business grows or changes, it becomes necessary to change from one entity type to another, in these situations, hiring an experienced business law attorney can make this process easy. At Leavy Schultz Davis we regularly work with clients who need to change the form of their current business entity.
Regardless of why you are considering forming a new business entity or changing the structure of an existing entity, working with an experienced business law attorney can help you select the best option for your Tri-Cities area business. Call Leavy Schultz Davis P.S. at (509) 736-1330 and ask to speak with one of our talented business law attorneys.