A famous saying says two people can solve far more complicated issues than alone. So, entrepreneurs often think about how to open a business for two entrepreneurs and how to do it legally. The fact is that the founders of a company may be close friends or relatives. Still, when it comes to money, especially profit distribution, there’s no place for sentimentality anymore.
Since businessmen, especially beginners, pay much attention to the study of production and commercial activities, as well as marketing and advertising, you should entrust legal issues to experienced professionals in business legislation. But, you better contact a law office specializing in such a field. We advise you not to trust Internet pages, which often turn out to be lies.
Errors in the legal form of an enterprise can give you not only interpersonal conflicts but also big troubles when paying taxes improperly, as well as problems with partners and investors.
How to form a business for two entrepreneurs so that conflicts do not arise between founders
In each country, there are unique firms regulating business activities and formats for paying taxes on a company’s profits. In the United States, there are four primary forms of business organization:
- Private enterprise. There are one or two founders, for example, if they are spouses. It has the fastest clearance and simplified taxation. Thus, if the husband and wife decide to organise a family business, the private enterprise is the best choice to start. Among the weaknesses of this type of business is full personal responsibility for all obligations and difficulties in attracting significant investments. If your business succeeds and you face scaling problems, you must consider changing your business type.
- Partnership. There are three types of business. A general partnership is when the founders have different rights and responsibilities, and a limited is when the role and responsibility of each shareholder are determined separately. As a rule, the joint venture is a temporary merger of two companies to implement various projects.
- The corporation implies a large scale and a large number of shareholders, so you will not choose the type of business if your enterprise has two heads. However, two types of corporations have either one or two shareholders, which is why you can choose this business format for two founders under certain conditions.
- Limited liability company. This is the most flexible type of business in the USA. This is why non-residents of the country pay attention to this type of business and think about the possibility of opening a business in America. As a rule, such companies open in Delaware. According to statistics, most American companies are registered in this state. The reason for this is the light conditions and features of local taxation.
Thus, if a foreigner plans to open a business with two founders and expand the activities of his company, entrepreneurs can focus on the global economy and find partners in America. Then it would be best if you considered choosing a limited liability company.
In the US, this is LLC. Remember that this type of business is only allowed in some states. So, there are the most favorable terms for it in Delaware.
In other countries of the world, another legislative regulation of business functions. So there are such types of business entities that have no counterparts in the US.