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Category Archives: Choice of Entity

Sole Prop vs. LLC vs. Corp.

October 2, 2017

I am going to discuss one of the most common questions I get when I speak to audiences with newer businesses. Should I be an LLC, should I be a corporation, and is it okay to be a sole proprietorship? It really depends on your situation, so we really want to look at your circumstances. I get clients in all of these different baskets, and we really have to look at it, carefully.

Now, typically, if you have more than one person in your business, you want to get rid of the sole proprietorship.… Read the rest

Corporate Formalities

August 10, 2017

Today, Shawn talks about corporate formalities, and the huge cost it can have. We’ve seen this over and over again in my career and my legal practice, and it then stretches into my business management and consulting work as well. We need to have good formalities with our entities because it can cause huge problems.

A lot of people get bored with the paperwork and legal documentation required to properly run a company and let me tell you, it’s not a lot of fun.… Read the rest

Should you form an Entity for your Business?

July 21, 2017

An entity is legally recognized as being separate and distinct from its owners.  For example: Limited liability companies (LLC), limited partnerships (LP) or corporations–as opposed to general partnerships or undocumented sole proprietorships. (Each legal entity is referred to as an “entity” for this post.) I am often confronted with the question of why business owners should form an entity for their business, and whether it is worth the trouble and cost.  In almost all cases, it is clearly advisable to form an entity for a variety of reasons.… Read the rest

LLC Versus S Corporation Versus Corporation, What Are The Pros And Cons?

July 14, 2017

It’s a common question I get. Do I want to be an LLC? Do I want to set up as an S corporation, or do I want to set up as a corporation? The answer truly depends on the company and your needs and your wants and your future plans. There is no one answer. One is not better than the other. What we have seen is an emergence of the LLC as being a clear choice to be reckoned with.… Read the rest

What is a Series LLC?

June 16, 2017

Sometimes you see the term “series LLC” floating around. Recently a lawyer asked me what a series LLC is, so the uncertainty pervades even among experts. The answer isn’t easy; it’s a nebulous concept.

The idea of a series is that you have separate groupings of assets and liabilities within a limited liability company, almost like mini-cells of a company within the LLC. A series can also be applied to trusts or other legal entities. But they’re challenging because it’s hard to conceptualize how you have a legal entity with separate groupings of assets and liabilities within it.… Read the rest

When To Set Up Entities

June 15, 2017

It’s often a common question that clients ask us when do we need to set up legal entities? When are we okay going without a legal entity and when should we set up an entity? Here’s a few rules and red flags to look for that might indicate that it’s time for you to set up an entity.

# 1 You have multiple people involved. If you have more than one person involved in your business, you’re probably going to want to set up an entity.… Read the rest

Practical Guide: Business Structures

June 6, 2017

A question I’m often asked is: “How should I structure my business?”

LLC? S corp? C corp?

The answer depends on the company and the wants, needs, and plans of its owner or owners. One structure is not better than any other until we see the big picture.

Several years ago, the limited liability company would not have been part of the discussion because many people were afraid to structure as an LLC. That is no longer true. Case law has clearly established that the LLC will be respected, so we don’t have to worry about that.… Read the rest

Do You Need an Entity to Protect You?

May 3, 2017

You’re starting a business? Congratulations. Did you set up an entity? Should you?

There’s plenty of hoopla these days about setting up a limited liability company or a corporation. If your goal is to build a business for the long-term, it probably makes sense to set up an LLC or other entity. That’s especially true if you have visions of eventually selling your business or getting other people involved because you want to have a separate legal entity that hosts your assets and liabilities.… Read the rest

All postings are intended to be planning tools to familiarize readers with some of the high-level issues discussed therein. No posting is intended to be a comprehensive discussion and additional details should be discussed with your transaction planners including attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity.