Choice of Entity
"Choice of entity" is the legal form which your business will take. Corporations and partnerships were the two traditional legal entities, but that list has grown longer to include limited partnerships, limited liability companies, and Subchapter-S corporations.
Suffice to say that deciding on what type of entity to use is one of the more important decisions you face as the owner or promoter of a new business. Why is the type of legal entity you chose for your business important? Because owners can be liable for tax liabilities and tortuous (think slip and fall) injuries caused by their business. Whether the owner is then personally liable for such liabilities of the business often hinges on the type of legal entity chosen.
1. C-Corp
2. Limited Partnerships and Partnerships
3. Sole Proprietorship
4. S-Corporation
5. Limited Liability Companies
For almost all start-up companies, the considerations that should be in the forefront are not the sale of ownership interests to the public or venture capital financing--the initial focus should be on:
"Choice of entity" is the legal form which your business will take. Corporations and partnerships were the two traditional legal entities, but that list has grown longer to include limited partnerships, limited liability companies, and Subchapter-S corporations.
Suffice to say that deciding on what type of entity to use is one of the more important decisions you face as the owner or promoter of a new business. Why is the type of legal entity you chose for your business important? Because owners can be liable for tax liabilities and tortuous (think slip and fall) injuries caused by their business. Whether the owner is then personally liable for such liabilities of the business often hinges on the type of legal entity chosen.
1. C-Corp
2. Limited Partnerships and Partnerships
3. Sole Proprietorship
4. S-Corporation
5. Limited Liability Companies
For almost all start-up companies, the considerations that should be in the forefront are not the sale of ownership interests to the public or venture capital financing--the initial focus should be on:
- the tax and tort liability issues,
- cost of maintenance of the entity,
- protection of intellectual property
- size and complexity of the entity,
- regulatory requirements that the local, state or federal government has placed on the proposed business activity,