What factors govern the type of entity I should use for my business?
The basic types of business ownership are partnerships, corporations or LLC’s, or sole proprietorships. If you are starting a business with little liability exposure and no clear revenues, it may make sense to start as a sole proprietorship. You can still register and use a “trade name” (also known as a “fictitious name”). Once the dollars start flowing, things change. There may be tax advantages to using one form of entity versus another. There are differing levels of exposure to the individual owners’ personal financial problems and this may govern the type of entity. Businesses with high potential internal liability may want to form various entities to operate the different divisions, thereby spreading the risk. Finally, there are differences in administrative burdens and costs depending on the entity. We do all we can to understand your goals, your exposure, and your financial resources to help devise the proper structure for your business.