How much choice is there re business entity formation?


That might easily serve as a shorthand answer to today’s above-posed blog headline query. Indeed, when it comes to making a selection concerning the type of structure a new commercial enterprise should assume, a business principal has a wide menu of choices.

And it pays – both figuratively and literally – to get it right.

We reference business entity selection on our website at the established Bay Area [nap_names id=”FIRM-NAME-2″]. We stress therein that entrepreneurs’ attention necessarily focuses on both “small details and big-picture planning.”

The combined micro and macro approach to business matters is likely nowhere more on display than with entity choice. How an enterprise will be set up and organized is a fundamental and first-step concern for any owner. Is power sharing contemplated? Will family members be involved? Are tax considerations a top-tier concern? What about liability?

Business structure: multiple formation options to consider

An in-depth online overview of business structures and entity choice underscores the large number and varied types of organizational possibilities that exist. Notwithstanding the sheer variety, that primer points out that business creators often narrow their choices significantly, emphasizing these select models:

  • Sole proprietorship
  • Closely held business
  • Partnership
  • Limited liability company
  • Corporation

Each of those possibilities offer pros and cons that link with a principal’s specific needs. If minimizing personal liability is a major concern, for example, LLC and corporate forms offer distinct advantages over other entity structures. Conversely, individuals highly concerned with preserving autonomy and decision-making powers might want to focus more closely upon a sole proprietorship or other closely run business.

Matters like taxation, raising capital and distributing profits and losses are also centrally important to many business creators.

The bottom line concerning entity formation stresses timeliness and proper due diligence. A proven business law attorney can provide sound and tailored advice that promotes an entrepreneur’s likelihood of success from the outset.


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