Choosing an entity type is an important step in forming a business – you want to ensure you are making the correct decision. This is why we have set up specific considerations to think about when deciding which entity is best for you.
Liability protection protects your personal assets from being at risk during a lawsuit against your business, as well as the business assets from personal judgment. The extent of this protection will vary from state to state, so be sure to call Handelin Law if your business will be formed in Nevada or California. It is also important to consider how you want your business and assets to be protected in case some sort of legal liability comes your way. Corporations and limited liability companies provide the most liability protection.
Later, down the road, once your business is formed you may want to consider what would happen if you decided to transfer ownership. Shareholders and members can transfer ownership, as well as partners and sole proprietorships, but each have their own advantages and disadvantages. If you cannot see yourself transferring ownership, you will still want to focus on the other factors.
Formation and Governing Process
Consider your ideal view of forming a business. Are you looking for formation and maintenance that is simple? If so, think about an entity such as a sole proprietorship or partnership. These two entities can make the formation significantly easier, but there are drawbacks to both. Even though there are a few more steps with a limited liability company or a corporation, there are many advantages. You may want to speak with one of our experienced business law attorneys to help you navigate the process.
A particularly important point to go over is taxes. If you are not willing to pay double taxation, you must consider your entity options. In a C-Corp, the entity revenue is subject to a tax from your state (but there is no income tax in Nevada) and federal government as well as taxed on the personal income you bring in. If this something you are hoping to avoid, then the flexibility of an LLC may be your best option, since it can avoid double taxation entirely.
What is my next step?
Your next step is to call Handelin Law to schedule a consultation or request one online. Our experienced business attorneys will be able to sit down with you to discuss all the options and answer any questions or concerns you may have.