Depending on what type of business you are starting, there are several different business types to be considered. The type of business you choose can have a big impact on everything from lawsuit liability to your ability to obtain funding. The following information was taken from lectures from Dr. Rossi's lectures.
- Sole Proprietership: A sole proprietorship is a business owned by one person. You may have hundreds of employees or work by yourself. A sole proprietorship offers the lowest level of protection from lawsuit, but is the easiest type of business to start.
- Limited Liability Company or LLC: LLCs are one of the most common types of small business in Florida. While being harder to start than a sole proprietership, it offers the most protection, as one can't be held personally liable. An LLC can be owned by one person or several people. Owners are called members.
- Limited Liability Partnership or LLP: For partnerships, many people choose to start LLPs in Florida. The advantages of an LLP is that it protects the individual from the liability of being a partner. If one partner runs up debt, it could help protect the other partner from personal liability. LLPs are cheap and reasonably easy to start.
- Corporations:A corporation is the most common form of business in the U.S. In a corporation, the company exists and an entity seperate from the individuals that run it. It can purchase property, sue and pays taxes seperately from the shareholders.The company is made up by people who own stock or shares and are called shareholders. A corporation is the best type of business to start if you are planning on raising capital from investors or making an IPO or initial public offering. A corporation also provides limited liability for its shareholders. The one downside to a corporation is that it is much more expensive to start as one must almost always have an attorney.