What Type of Entity is Best for Your Business?
By Daniel P. Costello, Esq.
Starting a new business can be a very exciting time. As a fellow entrepreneur and businessman, I have felt the butterflies of excitement in opening my own business. There are countless things to consider when opening your own business, your location, staffing, leases, acquisition of property, getting clients, and the list goes on and on. I have worked with many companies during their formation stages and have found that only by going through the checklists of starting a new business are the budding entrepreneurs or even the experienced businesses going to be successful in choosing all of the best options for their new company. Legally speaking one of the most important decisions a business can make is what type of entity will best protect the legal liability of the company, provide the best tax consequences, and also allow the most solid framework for growth. The following article is not a checklist. Rather it is a very brief overview in the choices available for new businesses in the start up phase. If you are considering a new business you should contact our office or your own attorney to ask them which business vehicle would be right for you.
There are many business entities that can serve a new business. Depending on the size of the business, the number of owners involved, and the expectation of growth, a different choice may emerge for everyone. In this article I do not discuss the more basic entities such as a sole proprietorship, a partnership, or cover in depth the complicated Series LLC or full C Corporation. To keep things simple, we will discuss the advantages of forming an Limited Liability Company or LLC and the main differences between a LLC from a “S” Corporation.