What kind of entity is right for my business? Do I really need a lawyers help with that? When it comes to the question of what type of entity you need, it usually comes down to a corporation and a Limited […]
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Avoid Formation Problems with Competent Legal Advice First

November 6, 2015

What kind of entity is right for my business? Do I really need a lawyers help with that?

When it comes to the question of what type of entity you need, it usually comes down to a corporation and a Limited Liability Company, or LLC. Which entity is ideal depends typically on some very specific considerations. There is no one-size-fits-all.

In some cases it is better to incorporate. In other cases, it is better for form a Limited Liability Company, and there’s a relatively detailed analysis that informs that choice. This is one of those specific topics where an entrepreneur or a founder absolutely needs the advice of someone who is experienced with these kinds of questions, who knows what questions to ask and can guide this decision.

It’s very difficult for an entrepreneur to make good choices or optimal choices on his or her own, even if the entrepreneur has done a lot of reading on the web. Of course there is a lot of information out there about this subject, but, in my experience when entrepreneurs try to navigate through this surprisingly complex set of considerations, they typically will step on a landmine somewhere along the way, and they won’t know that they’re doing that until it’s too late.

Perhaps an LLC is best for their business and they form a corporation instead, or vice versa. Perhaps they need to form a corporation, not an LLC, or perhaps they form the entity in the wrong State hoping that it is going to provide some benefit to them that it in fact does not provide.

It’s an area where entrepreneurs do themselves a disservice, they create problems in the future and they can cost themselves a lot of time and money if they don’t have advice in this area at the outset.

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