3 Factors to Consider When Choosing A Business Entity
One of the most important decisions you make when starting a business is choosing the type of legal structure you want for your company. Not only can choosing the right business entity reduce taxes and ensure efficient business operations, but it can also greatly minimize liability and affect the way you raise money. To help you determine which business entity is right for you, here are 3 factors you should consider:
Ease of Formation. There are many advantages and disadvantages between the different business structures you can choose for your business. For many business owners, the ease of keeping up with the formalities of a business entity is crucial to deciding. While sole proprietorships have no requirements for entity formation (other than to follow the local government business regulations,) corporations require formalities that can include conducting shareholder meetings or documenting corporate actions.
Tax Implications. The business structure you decide for your company will have its own legal and tax implications as well as benefits. Legally reducing the amount of taxes you are obligated to pay is one of the most important factors in choosing a business entity. Important aspects like your business income and gains or whether you want to pay you and your employees a salary can affect how much tax you are legally required to pay.
Liability Protection. Determining the right business entity can also depend on how inherently risky or prone to lawsuits your business might be. Some business structures can make you be personally responsible and liable for your employees, your property and even all the legal claims and debts your business owes to creditors. Consulting an experienced business law attorney will not only ensure that you will choose the best entity for your business but that you are protected beyond liability insurance.
At The Metka Law Firm, we are dedicated to helping you choosing the right business entity for your business, whether it be a sole proprietorship, partnership, limited liability company, C corporation or S corporation. Our attorneys help business owners avoid costly mistakes and legal disputes by crafting agreements and procedures aimed to help your business run smoothly. To learn how we can help select the right business entity for your company, contact us or schedule your free initial consultation today.