Whats the difference between; corporations,limited liability corporations, and partnerships?

Question

My friend and I plan to start up a franchise. We have been told to get in-corporated. Trying to get some information and question to be ask before stepping in to a lawyers office.

Answer 1

So my question is do you have a business started yet?  If not then you might want to simply consider a sole proprietorship or a partnership.  Corporations are somewhat expensive to run and you have quite a bit more regulation to deal with, which in turn means hiring an accountant, lawyer, and bookkeeper at the least.  Here are your options and my best explanation of what they are:

Sole proprietorship: A sole proprietorship is a business owned by one person. The owner may operate on his or her own or may employ others. The owner of the business has total and unlimited personal liability of the debts and or litigations incurred by the business.  A sole proprietorship is a very cheap way to get started, many corporations began as a sole proprietorship.

Partnership: A partnership is a form of business in which two or more people operate for the common goal of making profit. Each partner has total and unlimited personal liability of the debts incurred by the partnership. There are three typical classifications of partnerships: general partnerships, limited partnerships, and limited liability partnerships.  Partnerships are also very cheap to start up, however be weary of who you partner with, you are responsible for any and every action your partner makes and visa versa.  In a general partnership both are entitled to 50/50 profit regardless of the amount invested and both are jointly and severally liable for all debts and or litigations.  Be very specific in all manors of business when forming a partnership resolution, the more specific you are the less likely there will be legal ramifications in the future.

Corporation: A business corporation is a for-profit, limited liability company that is a separate legal entity from its owners. A corporation can be owned by multiple shareholders and is overseen by board of directors, which hires the business's managerial staff (ie. CEO, COO, CFO, etc.).  There are multiple types of corporations to include; an S-Corp, C-Corp, LLC, and of course a general Corporation.  Here is a link that explains some differences:  http://www.activefilings.com/en/informat...

Cooperative: Often referred to as a "co-op business" or "co-op", a cooperative is a for-profit, limited liability entity that differs from a corporation in that it has members, as opposed to shareholders, who share decision-making authority. Cooperatives are typically classified as either consumer cooperatives or worker cooperatives. Cooperatives are fundamental to the ideology of economic democracy.

My advice is to start up a business cheaply as possible, you do not need to waste time or money on incorporating your business, there are plenty of other things you'll be spending money on.  Once the business is up and running and showing a profit, then consider an alternative.  I would be good to talk to a lawyer about incorporating too, as laws vary from state to state.  FYI:  Delaware is commonly known as the best state to incorporate in, be sure to check out the reasoning for this before making a move.

Hope this helps answer your question, good luck!!!

Answer 2

Go to www.ask.com

you can get specific info there.

Answer 3

if youre thinkin bout gettin into business which i think u are

http://www.franchiseinc.com/ebook/page1/...

read this , i picked it up off a forum

http://www.franchiseinc.com/ebook/page1/...

its great and its getting great reviews, very logically sorted info

i wish yahoo answers had a followup you could post on.

id be curious to know how u end up