Organizing a Business

The choice of entity when organizing a business is important and will depend greatly on the specific facts of the venture. Corporations, “S” Corporations and limited liability companies all have beneficial traits when used with the right business. When forming a company with multiple owners it is important to create an entity structure and corporate governance rules that will see a company through both good and bad times.

Benefits of organizing a corporate entity for your business:

• Protection of Personal Assets. Corporations are separate legal entities and responsible for their own debts. Liability protection is one of the most important reasons people use corporate entities to do business.
• Privacy. Corporate entities provide personal privacy for its owners.
• Perpetual Existence and Succession Planning. Corporate entities can survive and endure indefinitely, and are therefore a vehicle for long-term continuity of a business.
• Credibility. Use of a corporate entity conveys credibility and confidence in the marketplace.
• Established Rules of Ownership. Corporate law provides a centuries-long backdrop of law and practice that enhances the ability of corporate entities to endure challenges.

Choice of Entity in Business Formation

The type of business entity that is best for a business depends on the circumstances of the business owner. Legal liability protections, tax implications and cost of formation and on-going administration all factor into the business formation decision. Corporations, S Corporations, and limited liability companies and limited liability partnerships all have situations that suit a new business.