This blog recently discussed the importance of carefully selecting a business form that meets the goals and needs of the business and also talked about limited liability companies as one example of a business form. The selection of a business form has important implications for how the business is run, how liability is determined and can have tax and other consequences as well. It is helpful when the business form selected is aligned with the characteristics of the business and those involved in setting the business up.
Once a business form is selected, it is important to also understand how to get set up, maintain business operations and face potential challenges in the future. Sometimes a business owner can plan around potential pitfalls to avoid problems down the road, while at the same time the business owner should be aware of how to respond to potential challenges and disputes should they arise. It is also important to ensure ongoing compliance with the requirements of a particular business form selection.
Different business forms — from limited liability companies to solo practitioners, partnerships and corporations — have different advantages and requirements business owners should be knowledgeable about. Each business form offers specific advantages but can also have specific requirements to be familiar with as well. Business owners can help avoid unnecessary exposure by being aware of how to properly select a business form and set up and maintain their business using the best business form for them and their business.
It can seem like there is a lot to consider when setting up a business which can be true. With the proper understanding and guidance from an attorney, however, those decisions can be made simpler while maintaining their importance to the future growth and success of the business.