One decision that nearly every Illinois entrepreneur makes when starting a new venture is under what type of entity to operate. This may just be one of the most important considerations during the business formation process. The choice of entity that you make sets up the framework for the business from now into the future.
The differences among the four primary types of entities (sole proprietorship, partnership, corporation and limited liability company) provide you with different benefits. Deciding which benefits would help make your business a success is the trick. For instance, how much liability for the debts and mistakes of the business do you want to retain?
Each entity provides varying degrees of personal protection. Each also provides different tax benefits and liabilities. Another consideration is the degree of complexity you want to handle when it comes to the documentation. Sole properietorships require the least amount of paperwork, and corporations require the most.
Another thing to consider is the amount of control you want to retain. Sole proprietorships allow you the most control, and corporations allow the least since they have boards of directors. Other issues, such as raising capital, can influence the type of entity you decide to form.
Determining what entity will best support your vision for your business may take some time and consideration. One way to make the process easier may be to enlist the advice and guidance of an Illinois business formation attorney. He or she could go through each of the pros and cons of each type of entity with you to give you the information you need in order to make an informed decision.
Source: businessnewsdaily.com, “How to Choose the Best Legal Structure for Your Business“, Sammi Caramela, Accessed on Nov. 25, 2017