Decision – Corp, LLC, Other? This choice includes some key questions.

  • Owner total and type. How many owners will there be, and could some of these foreseeably be investors like other LLCs or entity types? Partnerships require at least two partners minimum but have no max, while an LLC structured for to be taxed as an S-Corp cannot have more than 100 members.
  • Liability Limitations. How important is limiting personal liability for debts or claims against the business? In general, incorporating is the best means of limiting many forms of business liability.
  • Service Type. Will this business provide the market with legal, medical or other regulated professional services? This may add requirements to who can make management decisions and what documents to file.
  • Tax Advantages. Which business structure will result in the lowest taxes? There is no universal answer to this question. Tax-wise, however, some structures are better for some situations. Will your business want pass-thru taxation, structured corporate deductions, layered or international arrangements?
  • Operational Structure. Will the company be reporting to investors or have other complex operations that benefit from structure? Corporations carry certain formalities, while a general partnership could exist with none.