The importance of forming the proper legal entity to conduct business cannot be understated. Each of the entities described provide business owners insulation from personal liability, protecting their personal assets from liability which may result from their business activities.
When selecting a business entity business owners must evaluate the benefits, limitations, and tax ramifications associated with each type of legal entity prior. Because each business is unique, careful evaluation of each entity’s characteristics in conjunction with the specific nature of the owner’s business is a necessary prerequisite to minimizing risk and maximizing business efficiency moving forward.
The following is intended to provide potential business owners an overview of three of the most common types of limited liability entities utilized and to aid in the selection of the most suitable entity for a given business owner.