Get Startup Smart: Choosing the Right Entity for a New Business
by Jennifer L. Villier, JD | Legal Education Faculty, WealthCounsel
Choice of entity is fundamental to business planning. The best form of entity for a client’s business depends on several factors, including the client’s industry, location, and size. The decision involves both tax and non-tax considerations and must take into account long-term and short-term goals, including whether the business expects early losses or whether it may eventually go public.
When representing a startup company, business attorneys should address choice of entity with the founders. This discussion should include a review of all relevant factors to enable the client to make an informed decision. Whether business clients retain counsel before or after their entities have been formed, attorneys should discuss the options a client has for establishing or converting to the optimal form of business entity.
This article considers circumstances that may lead a new business to choose one entity over another.
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