When you're ready to start your own business, there are many factors to consider. What will you sell, where will you be located, how will you make a profit? But one of the most important questions to consider is this: what type of business entity will be best for the success of your company?
There are a variety of business entity options available to Georgia business owners and each type has its benefits and drawbacks. Which entity is right for your business depends on several factors, including the number of owners, source of financing, and your succession plan. Two of the most common business entities available to Georgians include:
Limited Liability Companies (LLCs)
This is the newest, but most popular business entity. An LLC is typically less expensive to set up and has fewer annual formalities than a corporation. LLCs also give business owners a level of protection for their personal assets in case of claims against the company, and can be taxed as either a sole proprietor, a partnership, or a Subchapter S corporation. With less annual upkeep required and a flexible tax status, many business owners choose to use an LLC because they are generally easier to maintain.
Like an LLC, a corporation also offers a level of asset protection for business owners, but requires more housekeeping, including bylaws, annual meetings, recorded corporate minutes, and more. With the rise of LLCs, fewer corporations are now formed in Georgia. Despite the ease and tax flexibility of LLCs, a corporation could be of benefit to your business, and the additional formalities can be fairly easy to manage.
If you're wondering what type of business entity is right for you, contact The Beck Law Firm, LLC. We will help you determine what will work best for your business and walk you through the process of setting up your corporations, LLC, or other business entity.