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BUSINESS FORMATION
This office has been involved in assisting business formations for numerous small businesses. There are several different forms new businesses might take:
A. Limited Liability Companies
B. Corporations (Regular and S Corporations)
C. Partnerships
The choice of the right form is important to the success of that new business.
A business may become a Corporation to gain certain liability protection and tax treatment. A business may become a Limited Liability Company for liability protection similar to the corporate form, but the Limited Liability Company gives more choices as to the taxation of that business and with much less need for formal minutes, meetings and records. A business may instead use the Partnership form, which is less costly to start. However, a Partnership has no liability protection, other than what you might gain through liability insurance. The parties in a partnership will have personal liability for actions and liabilities of the business.
Which form is right for each new business needs thorough
discussion as to possible liability, the goals of the business
owners and input of the owners’ CPA or accountant on tax
matters.
Because of the lack of liability protection in Partnership form of business and a Corporation’s rigidity, formal requirements and lack of tax options, we often find that the Limited Liability Company to be the most beneficial business form for new
businesses.
Next: Filing with the Indiana Secretary of State
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