Selecting a corporate structure

corporate-structure

After I had some time to practice and finalized the name for my business, it was time for me to incorporate my business.

The Small Business Association (SBA) web site had a wealth of information to research through while deciding which form of business to use.

As a sole proprietor, basically I would be liable for everything. I didn’t like the idea that my assets would be at risks (not that I had any at the time) so I looked at the other business structures.

Partnerships looked appealing, but I didn’t know who would be interested in partnering with me on starting a pooper scooper business. The main difference between a sole proprietorship and a partnership is that two or more owners of the business had equal shares in the profits of the business. What I found most appealing about a partnership was that I wouldn’t have all of my assets at risk.

I also looked at limited partnerships. Limited partnerships add a layer of limited liability to the organization. However, limited partnerships seemed to only work for professionally licensed occupations, such as doctors or lawyers.

I examined incorporating the business as a corporation. I liked that a corporation limited the liability of its owners, but I wasn’t comfortable with issuing company stock. I also wasn’t comfortable with selecting a board. Another disadvantage of corporations is double-taxation on the owners of the business.

Finally, I considered a limited liability company. What I liked best about the LLC is that it was similar to a corporation in that it limited my personal liability. The LLC would be a separate entity from me and avoided the double-taxation associated with a corporation. Based on this, I decided to go ahead and file articles of organization for PetCorps LLC.

Unfortunately, the state of Kentucky rejected my application because LLC’s could not use “corps” in their name as that is reserved for use with corporations. I didn’t want to change the name of the company so I started to think about a workaround.

I noticed that there were big name companies like Proctor and Gamble or Unilever. Underneath the company, were various brands that were part of the company but known individually by their trademarks. I decided to do the same thing. But now I needed a name for the LLC.

As I was reading Proverbs one day, I came across a verse in the New King James Version. Proverbs 12:10 said, “A righteous man regards the life of his animal, but the tender mercies of the wicked are cruel.” I continued to meditate on the first part of that verse. Then it hit me: Regarding Animal Life. PetCorps, after all, was all about holding animal life in high regard so I continued to whittle away at this phrase until finally I had the name of the LLC. ReALife LLC.

I filed new articles of organization and voila, ReALife LLC was born on January 27, 2007. I continued to market my service under the PetCorps Service Brand, using the military-style logo on all of my media.

It wasn’t until several years later, that I decided to dissolve the LLC and operate the business as a sole proprietorship. But more on that later.

Now that the business was formed and I had practiced my craft, it was now time for me to start advertising so I could officially open for business.

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