Starting a business is a complex process that demands authoritative legal advice coupled with strategic and technological accumen. We begin by taking an overview of what you are trying to accomplish to then make the determination about what types of documents you will need.

There are a variety of different types of businesses. The primary types are the LLC and the S-Corp. 

An LLC is an entity created by state statute that allows you to run a business as an individual while providing protection for personal liability arising from your business operations. For example, if you are driving a vehicle while working for your LLC and cause damage, in most cases the LLC will protect the person injured from suing you personally. We form an LLC for your business by filing Articles of Organization (in Missouri – other states may have different terms for similar entities).

A corporation, by contrast,  requires the filing of Articles of Incorporation with the Secretary of States Office. The Articles of Incorporation define the executive structure of the corporation, as well as indicating how shares in the corporation will be valued and owned upon startup. 

LLC’s typically are easier to operate because there are no defined compensation rules that require quarterly reporting with the tax administrations of the state or federal government.

Corporations have additional reporting requirements and usually require an operating agreement to define the roles and obligations of the various members and executives of the corporation.

However, corporations have the advantage of allowing easier investment. Companies with larger revenue streams and the potential for more financing obligations can certainly benefit from the ability to fractionally sell interest in the company.

Both federal and state law define non-profit entities, typically with reference to the federal income tax code’s definition of non profit entities.  The exempt purposes set forth in section 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals.

Either an LLC or a corporation (depending upon how they are registered with the federal governement) can elect non-profit status. But, there are challenges associated with winning approval from the federal government as well as in maintaining your tax exempt status.

As a result, those leading non-profit entities require additional definition and attention when creating their business structures in insure that their non-profit benefits are not abandoned.