The First Step In Business Formation: Choosing An Entity

Choosing the right entity to form can be crucial to the growth of your company far down the road, so make the right choice now by consulting with attorneys who have decades of experience helping entrepreneurs start off on the right foot.

Common Entity Choices

Entity choice can affect taxes, control over your business (in partnership and multiple owner situations) and exposure to personal liability if the business is sued among other issues.

  • Limited liability companies are a popular choice, especially with small-business owners. They function as a sort of hybrid between a partnership and a corporation. Taxes on income and losses pass through the company to the LLC's members. They also determine each member's role, including handling the daily operations of the business. Personal liability is limited as well.
  • S-corporations also allow taxes to be passed through to shareholders, but may not be used as often as other choices of entity since owners must meet certain criteria in order to make the election as a subchapter S-corp. Personal liability is limited.
  • C-corporations pay taxes, and their shareholders must account for gains and losses on their personal tax returns. This double taxation often turns off smaller businesses, but the structure may make sense for larger ones. C-corporations must adhere to numerous paperwork and legal requirements in order to maintain their status. Owners receive protections from liability.
  • Partnerships may not require much paperwork, but they also do not provide personal liability protection to the partners. Each partner pays taxes on income and losses as well.

Forming A Relationship And An Entity

Beyond formation, Retz & Aldover LLP can assist with compliance issues going forward. Different entities have certain legal requirements that must be met in terms of filing and documentation. We can preserve your status as an entity by helping you properly handle compliance issues.

Building a relationship with an attorney from the beginning can help ensure that your business remains in compliance with all state, local and federal laws, and provides assistance with any legal issues that may arise, including those that may require litigation.

Contact our firm today to schedule a consultation regarding how we can help your business reach its true potential. Call us at 310-540-9800 or contact us online.