Select the Proper Legal Form for Your Business

Early in your small business development, you will need to select the most appropriate form of legal entity for your business. If you take no action, your business form is a Sole Proprietorship. Other legal entity forms include: Partnership, Corporation, Limited Liability Company (LLC), Limited Liability Partnership (LLP) and others. Note both C and S Corporations are simply corporations, but with different federal tax considerations.

Because corporations and LLC’s offer some personal liability protection from business related problems, they are often favored by attorneys who advise small business owners. In addition, there are considerable differences in the cost and legal requirements of establishing and maintaining the various forms of business entities.

You can find out more about the advantages and disadvantages of each form of legal entity by attending our “Legal Issues & Asset Protection” workshop. If you need further assistance, request a SCORE Counselor who may, in turn, recommend an attorney in warranted situations.