Available Forms of Business Entities

The law gives certain flexibility to entrepreneurs in the structuring of companies. This choice between several legal forms of entities allows entrepreneurs to expedite the beginning of their commercial activities and obtain maximum productivity. Currently  the following business structures exist:

 

·        sole proprietorship

·        general partnership

·        limited partnership

·        limited liability company

·        C corporation, and S corporation

·        Non-profit, and not-so-long ago developed new structure

·        B corporation

 

The efficiency of any of these structures depends on the nature of the business and the goals of its organizers. In order to determine which type of entity is the best for particular commercial activities, organizers should ask themselves:

  1. Will I be the sole owner of the company, or will I enter into partnership relationships with third parties later? How much flexibility do I require in daily operations of the company? What voting and managerial rights do I want to retain for myself, and what percentage of these can be granted to other partners?
  2.   Is there a need to protect my personal assets from liability that may be incurred during business operations?
  3.  Do I need to raise substantial capital through sources other than my close contacts or bank loans?
  4. What form of tax and accounting system do I prefer?

 

Business organizers should carefully compare various legal structures with the assistance of an experienced business attorney in order to determine which one will be most beneficial for their business activities.

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