SELECTING THE LEGAL ENTITY FOR YOUR ENTERPRISE

One of the first major decisions you will have to make as you start your new business is the form of legal entity it will take. To a large degree this decision may be dictated by the way you have organized your operations and whether you intend to work on your own or in conjunction with others.

The form of entity you choose can have a significant impact on the way you are protected under the law and the way you are affected by income tax rules and regulations. There are four basic forms of business organizations:

Sole Proprietorship
Partnership
Corporation
Limited Liability Company

Each has its own benefits and drawbacks and is treated differently for legal and tax purposes.

The business entity that's right for you depends both on what you expect from your business now and several years from now. A few hours of counseling early with accounting professionals that have expertise in business formation can save a lot of trouble, time and money later on.