Every small business owner needs to be prepared for the immense responsibility of owning a business. Even if your business’s legal structure protects you from certain liabilities, you can still be held accountable for your mistakes or crimes and your business may suffer in return.
For business owners in St. Louis, Springfield or Kansas City, it’s important to understand state and federal laws and know how to proceed when a legal issue develops. LawInfo has the Missouri small business law information you need from choosing a business structure to writing a business plan.
Financing a Small Business in Missouri
Perhaps the largest hurdle for most small businesses in Missouri is securing funds to pay for assets and the usual startup costs. Few owners can fund their own small businesses. You will probably need to seek business financing.
The good news is that you can find financing from several types of sources. The bad news is that you’re competing for that money and those sources may be reluctant to finance unprepared, new businesses. A thorough business plan that details the startup costs and demonstrates your ability to recoup those costs can be critical to getting financing.
Several business financing sources you can use in Missouri include:
- Small Business Loan Program—A state program that provides low or zero-interest direct loans for small (15 employees or fewer), Missouri-based businesses.
- Bank loans.
- Angel investors.
- Venture capitals.
- Public stock investment.
Missouri Business Entities
When you start a small business in Missouri, the legal structure you choose for it depends on the type of entity it is. There are two major types of business entities in Missouri under which are several distinct types of legal structures:
- Non-Statutory Entities—These kinds of businesses don’t require registration with the Missouri state government. They are the most basic business structures.
- Sole Proprietorships—A business with a single owner who directly manages its operation, makes all decisions, benefits from all of the profits and accepts full liabilities and responsibilities. Missouri law doesn’t recognize a separation between the business and its owner.
- General Partnerships—Similar to a sole proprietorship except that two or more partners share in the responsibilities, liabilities, management and profits. Like a sole proprietorship, each partner is taxed individually and enjoy flow-through taxation.
- Statutory Entities—These kinds of businesses required registration with the state because their legal and tax organization is more complex than those of non-statutory entities. Where non-statutory entities enjoy tax benefits, statutory entities enjoy liability protection.
- Limited Partnerships—One or more general partners share the business’s liabilities while limited partners enjoy liability protection. Both types of partners enjoy flow-through taxation. While limited partners are sometimes barred from participating in the management of business operations in many states, Missouri permits limited partners to do so while still enjoying liability protections.
- Limited Liability Partnerships (LLP)—Similar to general partnerships but every partner enjoys the same liability protections offered to limited partners in limited partnerships. However, every partner is still accountable for personal liability in business matters.
- Limited Liability Limited Partnerships (LLLP)—Similar to a limited partnership, but both general partners and limited partners gain the liability protection offered in LLPs (with the same personal liability caveat, though).
- Corporations—A business that is owned by shareholders, is operated by directors and exists as its own liable entity separate from its shareholders. Shareholders are shielded from liability but are subject to double taxation since the corporation is itself a taxable entity. There are different types of corporations, each with unique taxation, liability and organization structures.
Speak to an Experienced Business Law Attorney Today
This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified business lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact an attorney in your area from our directory to discuss your specific legal situation.
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