Determining Whether an LLC Is Right for You
IN THIS CHAPTER
Comparing different entity types
Deciding which entity is right for your situation
As a corporate consultant, the most common question I get is “Which entity is right for me?” That’s also the question that’s hardest to answer. After all, the entity type that’s right for you depends wholly on your individual circumstances. You have to take into account all aspects of your business, such as the income you anticipate bringing in, the number of employees you intend to have, the amount of recordkeeping you’re comfortable with, the state(s) in which you will be operating, how you intend to obtain financing, your exit strategy, and other personal preferences.
The majority of the time, I can safely refer clients to the limited liability company simply because it’s so flexible that it can work for most business needs. However, that’s not always the case, and the worst time to find out you chose the wrong business structure is after the fact. As you find out in Chapter 7, where I deal with converting to and from different entity types, rectifying this mistake can result in a monstrous taxable event.
So this is where I help you avoid all that drama and get started in the right direction. This chapter compares LLCs with ...