Just as no one pair of shoes fits everyone properly, so too is there a need for more than one type of business organization in Ohio. Different ways of organizing your new business have their own advantages and disadvantages. Which one is right for you depends in large part on what type of business you are creating, and your goals and plans for the business.
For instance, creating a corporation can be useful, because it allows the owners to limit their personal liability and lets them raise funds by issuing stock. However, corporations must follow certain rules to the letter, and may face a higher tax bill.
On the other hand, a general partnership can save the business money in taxes, but you and your partners could be fully liable if the business is ever sued. Also, it is necessary that the partners be able to work together smoothly, or things can become bogged down. It can also be hard to sell a general partnership business, if that is your eventual goal or contingency plan.
Keep in mind that the type of organization you choose now is not set in stone. As your goals or needs change over time, reorganizing can be a helpful option. But the law requires you to follow a specific process to reorganize, and without the aid of an attorney, you may run into trouble.
An attorney can also help at the organization stage, by discussing your business plan and helping you select an organization model that best fits that plan.
