Is Your Business Owned by a Business Entity?

One of the first choices you’ll need to make when beginning a business is whether to operate as a single proprietorship or to create a business entity like a limited liability company (LLC) or a corporation. Every alternative has advantages and disadvantages of its own, so it’s crucial to comprehend how your decision will affect you.

If you decide to run your business solely, you and your company are virtually one and the same. You’ll use your personal tax return to file your taxes, and any debts or legal troubles that result from your business activities will be your own responsibility. This approach can be problematic if you’re dealing with huge sums of money or if your firm has a lot of legal or regulatory requirements, despite being quite easy and affordable to start up.

Your business will be treated as a different legal entity from you if you decide to create a business entity, such as an LLC or a corporation. You will have more freedom in how you set up your company and handle your finances as a result, and your personal assets will be protected from your corporate responsibilities. To start a company corporation, however, can be more difficult and expensive than running a sole proprietorship, and you’ll need to adhere to a number of legal obligations like completing yearly reports and keeping accurate records.

If you choose to create an LLC in Arizona, the procedure is rather simple. You must select a distinctive name for your company, submit your articles of incorporation to the Arizona Corporation Commission, and designate a statutory agent to accept legal notices on your behalf. While you are legally permitted to act as your own statutory agent, it is typically advised that you use a professional agency to make sure you don’t miss any crucial deadlines or notices.

You must register your “doing business as” (DBA) name with the Arizona Secretary of State’s office if you decide to conduct business under a DBA rather than creating a company organization. While operating under a DBA can be easier and more adaptable than creating a corporate corporation, there are some drawbacks to take into account. You won’t have the same legal protections, for instance, as you would with an LLC or corporation, and you might find it challenging to get financing or sign contracts using your DBA name.

The purpose of a DBA is to enable you to conduct business using a name other than your formal business name or your given name. This can be helpful if you want to have a distinctive brand identity or if you run several companies under one roof. A DBA may not be the ideal option for many organizations, though, because it doesn’t offer the same amount of legal protection as a registered corporate entity.

In conclusion, your particular business needs and objectives will determine whether you should establish a business corporation, operate as a sole proprietorship, or use a DBA. To verify that you’re following all the legal standards and that your decision is well-informed, you should speak with a legal or financial specialist.