Choosing the right type of entity when forming a business
Posted on Thursday, October 22nd, 2009 at 9:06 am
When an individual or group of people decide to start a business, one important decision is choosing a business entity type. Making the right choice at the outset is necessary because it is difficult to change a business entity type after the business has been formed.
The most common types of business entities include S-corps, C-corps, limited liability companie, limited liability partnerships, general partnerships, and sole proprietorships. Each entity type has different advantages and disadvantages, depending on the facts and circumstances of the business.
Each entity has different implications for the financial, accounting, tax, and legal implications of the firm. For instance, in some types of partnerships, the personal assets of general partners may be used to pay off outstanding debt. However, in most types of corporations, the shareholders' personal assets are protected from debt collectors.
If you are considering forming a business and unsure which type of business entity is best for you, contact the Des Moines business formation lawyers of LaMarca Law Group, P.C., at (877) 327-2600.