- Starting a business and not sure which type of entity to create?
One of the important decisions you will make when starting a business is your decision of exactly which type of entity to choose and operate your business within. The choices include a sole proprietorship, C-corporation, S-corporation, general partnership, limited partnership and limited liability company (LLC).
- You’ll need to consider the various tax, legal and business implications of each one. Once you select an entity type it may prove very costly to change it down the line. So even though the correct choice will not, unto itself, provide a measure of success, the wrong choice may increase your likelihood of failure. Measure twice and cut once.
- Do you need to protect personal assets and provide legal protection to the owner(s)? If so, you will eliminate the proprietorship and general partnership entities. Do you anticipate selling the business in the next 10 years? That may eliminate the C-corporation entity. Do you have any employees other than the owner(s)? If not, then perhaps a sole proprietorship, partnership or limited liability company is best advised. Do you need legal protection but don’t want administrative costs and headaches? Consider a limited liability company. These are just the beginning questions, there are many other questions to be asked and issued to be addressed.
- We have experienced instances where clients have come to me after having started their business and it was too late to implement certain elections which ultimately worked against the client.
- We have helped numerous individuals and companies start either their first business or a second or even a third business. We can help you through the myriad of choices and provide our recommendation of the entity that best suits your needs.
- Feel free to contact us at any time regarding your situation