Of all the choices you make when starting a business, one of the most important is the type of legal structure you select for your company. Not only will this decision have an impact on how much you pay in taxes, it will affect the amount of paperwork your business is required to do, the personal liability you face and your ability to raise money. With so many choices of type of formation such as a C Corporation, S Corporation, LLC, General and Limited Partnerships (LP), it is important for entrepreneurs to evaluate the following main criteria:

• Legal Liability – to what extent do you need to be insulated from legal liability?
• Taxes – what are the opportunities to minimize taxation based on your situation?
• Cost of Formation and Administration – State filing fees and record-keeping vary from state to state and type of entity.
• Flexibility – a maximize the flexibility of the ownership structure by considering the unique needs of the business.
• Future Needs – you must plan for uncertainties such as disability or selling your business.

These are only the primary criteria for most business owners, your personal and business situation may have to involve the analysis of more criteria in selecting the appropriate business entity. The advice of a trained corporate lawyer should not be ignored when making such a decision.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have any questions about what type of business entity you should form, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a member of the  General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.