SELECTING A BUSINESS ENTITY

By: Matthew Snow

If you are considering starting a business, you should first decide who will be part of your “team.” You should include at least an attorney and an accountant as part of your team. These professionals can assist you through the legal and tax quagmire that will confront you.

One of the most important decisions to be made is the type of business entity. The most common types of business entities are: sole proprietorship (one owner), partnerships (minimum of two owner), corporations (minimum of one owner), and limited liability companies (minimum of one owner).

The choice of business entity will factor in risk (protection from personal liability), potential for growth in interest holders, tax implications, level of control by interest holders, and operating formalities.

Prior to being “ready and able” to start the operation of you business, you should complete at least the following activities: select the type of business entity, file the necessary formation documents, adopt rules for the operation of the business, establish responsibilities of interest holders, understand the liability exposure for interest holders, and understand the tax implications and IRS filing requirements.

Once you have done your research and filed the necessary documents, you may dedicate your time and energy to running the business.

When selecting your team, choose professionals who will continue to work with your company as it grows.

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Disclaimer: This information is intended for general interest only. It is not intended to be nor should it be deemed as legal advice. Please consult with one of our experienced attorneys at Biberaj & Snow for the best advice specific to your needs.