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Overview

The selection process for the “best” entity type for your business, or, the elimination process of the entity type that will not suit your needs, is complex and requires thought of not just the initial opening of your business, but the economics and liability exposure you perceive for your business for the first few years. The decision as to which entity type to organize and run your business is often a difficult one in that there are usually two or more criteria for choosing a type of entity that are in conflict.

The choices for entity types are actually few in number:

            Sole Proprietor,  Partnership,  Limited Liability Company,   S-Corporation,   C-Corporation.

Discussion

We have prepared two types of documents for analyzing the various similarities and differences between the types of entities.

            FInfo-4b  Entity Criteria Comparison Matrix

This is a chart of various criteria that should be considered in setting up your business.  Review these items and highlight the ones that are important to you and, or, for which  you have questions.  These “highlighted” items will help determine the entity type which should be considered for you situation.

            FInfo-4c  Entity Descriptions, Advantages, Disadvantages

This is a set of tables that compares and contrast the various attributes of each entity type.  Again, review these items and highlight the ones that are important to you and, or, that you  have questions about.  These “highlighted” items will help determine which entity type  should be considered for you situation.