Legal Business Structures

Your business can be organized in a number of ways, depending on its nature and your objectives. You may operate a business by yourself (sole proprietorship), with another person (general partnership), or as a separate legal entity (corporation, limited liability company, or limited partnership). Each type of business structure has advantages and disadvantages.

Sole proprietorship (єдине право власності)

A sole proprietorship is the simplest form of business where one individual conducts the business. The business owner is personally liable for all the obligations of the business. A sole proprietor does not have to be registered unless the business uses an assumed business name. If the name of the business does not include the legal name of the business owner, the business name must be registered as an assumed name with the local city or town in which it is located. This allows the public to identify who is transacting business under that business name.

General partnership (повне товариство)

A general partnership is an association of two or more persons doing business. All partners are personally liable for the obligations of the partnership. A general partnership does not have to be registered unless it uses an assumed business name. If the name of at least one of the general partners is not part of the business name of the partnership, the business name must be registered with the local city or town. The registration allows the public to identify who is transacting business under that business name.

Corporation

A corporation is a legal entity created under Rhode Island law by filing articles of incorporation with the Secretary of State. A corporation is owned by its shareholders. The corporation acts as a single entity. It exists separately from its owners. It continues to exist even though the shareholders change. As a separate legal entity, the corporation is responsible for filing its own tax returns. A corporation may own property, sue, and be sued.

Each corporation must have and continuously maintain in this state a registered agent upon whom any process, notice, or demand required or permitted by law to be served upon the corporation may be served. (If one wishes to sue a corporation, the legal papers are served on the

registered agent.) Thus, it is necessary that the registered office have a street address.

Common types of entities filed in Rhode Island with the Secretary of State are business corporations, non-profit corporations, professional service corporations, limited liability companies, limited partnerships, and registered limited liability partnerships.

A business corporation is a for-profit corporation. A non-profit corporation is formed for any lawful purpose but not for financial profit.

A professional service corporation is a for-profit corporation formed for the purpose of providing one or more specific types of professional service and all the shareholders of the corporation must be licensed to render one of the professional services. Corporations formed under Rhode Island law are called " domestic" corporations. Those formed under the laws of other states or countries, but which are authorized to transact business in Rhode Island, are called " foreign" corporations.

Limited Liability Company (суспільство з обмеженою відповідальністю)

A limited liability company (LLC) is a legal entity having one or more members. The LLC can be managed by one or more manager or by its members. Managers can be, but are not required to be, members. The internal affairs are governed by operating agreements, which may be analogous to corporate by-laws, or partnership agreements.

Each LLC must have and continuously maintain in this state a registered agent upon whom any process, notice, or demand required or permitted by law to be served upon the LLC may be served. (If one wishes to sue an LLC, the legal papers are served on the registered agent.) Thus, it is necessary that the registered office have a street address.

To form a limited liability company in Rhode Island, you must submit articles of organization to the Secretary of State. Before articles of organization can be filed, the name must be searched in order to insure that it is not deceptively similar to other entity names on file with the Secretary of State. A certificate of organization together with the duplicate article of organization will be returned to the filing party as evidence of organization.

Limited Partnership (командитне товариство)

A limited partnership is an association of two or more owners, having two classes of ownership -

general partners and limited partners.

The general partners commonly run the business and are fully liable for all debts. Limited

partners are only liable for debts to the extent of their capital invested.

To form a limited partnership, a certificate of limited partnership must be filed with the Secretary of State. As with the other entities listed, the name must be searched to insure that it is not deceptively similar to another name on file and a registered agent must be maintained. A duplicate original will be returned to the filing party as evidence of the formation.