Corporate Structure is the First consideration for
small businesses
What type of business
entity is right for you? Today there are many choices of
business entities available so you should spend some time to
choose the best entity for your business.
Due consideration should
be given for the choice of business formation and the type of
business entity you should use. In most states, there are
several different types of business entities you can use for
your business formation:
1. Sole
proprietorship - This type of business is used for VERY small
business but does not afford any liability protection.
Most attorneys agree that this is the business form you should
NOT use.
2. Corporation -
This type of business entity is traditionally the most common
business form and is very popular in large businesses. The
law regarding corporations has a long history thus giving you
predictability in legal operations.
3. Limited
Liability Companies - This type of business is fairly new and
does not have the long history of legal precedence, but the LLC
law itself is modern and totally updated. The LLC is often
a good choice for small and medium sized businesses.
4. Partnership -
This type of business is often used for very small partnerships
involving two or more individuals. Like a sole
proprietorship, the form does not provide any liability
protection so it is not a good form for most businesses.
5. Limited
Partnership and Limited Liability Partnership - This type of
business generally provides the benefits of a partnership with
the legal protections of a corporation.
|
