Starting a business is already a challenge to aspiring entrepreneurs. There are so many factors that are present in the industry that might affect an upcoming business venture. One of these probable factors is choosing the correct business entity to apply. This particular component has something to do with the flow of the business. The management will rely on the selected structure.
More so, this write-up will discuss several types of business entities in Virginia, United States. By the end of this article, some takeaways might help the entrepreneurs develop their company’s best structure.
Sole proprietorship
For starters, this particular business structure is number one on the list but not necessarily the best among the other types.
- It pertains to a solo operation of the business under a specific person.
- All the decisions and financial matters will go according to the owner’s perceptions.
Partnership
Compared to the sole proprietorship, using the partnership as the business structure requires the following:
- It consists of at least two to three persons involved in building the business.
- An agreement will be there as a representation of capital shares and distribution of income and losses.
- The decision-making process and responsibilities allotment require the presence of the partners.
Limited Partnership
Another variation of business structure is related to general partners. In this type, the investors can buy interest but still give importance to general partners’ responsibilities in operating the business. Some entrepreneurs do not prefer this structure because financial problems may arise and go beyond their personal belongings.
Limited Liability Company
For this type of business structure, entrepreneurs find it reliable and more legally formalized because it does not affect their assets by giving limited liability protection. Here are some essential details of this structure:
- No member limitations
- No annual board meetings
- No buy and sell
If you’re going to choose this business entity for your start-up, there’s a process you should complete. And, if you’re wondering how much does a Virginia LLC cost, it is approximately $100 to $550
Here is the breakdown of the initial and subsequent costing:
| Types of Fees | Costs |
| Filling | $100 |
| Operating Agreement | $44 to $99 |
| Employer Identification Number | $0 to $70 |
| Registered Agent Service | $0 to $125 |
| License Research Service | $99 |
| Annual Registration | $50 |
C Corporation
A type of structure suitable for capital ventures. Listed down below are the things to consider before engaging:
- Requires annual meeting with the boards
- Personal assets separation with debts, tax, and legal structures
- Taxable corporate profits
S Corporation
This type of business structure is taking advantage of the Subchapter S of the federal internal revenue code to avoid corporate income taxation. The following are additional details:
- Allow legal separation and protection of personal assets from the settlement of losses.
- Allow a limited number of shareholders.
To sum it up, there are six business structures featured in this article. The aspiring entrepreneurs must be careful and wise enough to decide what to choose and use. Here are some key takeaways:
- Assessment of initial capital
- Sourcing out other expenses
- Take advice from experts and learn from them afterward
- Do additional research
- Proper goals projections
- Be updated on the current industry events
