Corporate entities serve to protect a business' proprietors and key principals from tax or financial liabilities. In the event of a lawsuit of or government inquiry, personal assets cannot be seized, thereby protecting owners' home equity, investments and even their savings.
Which sort of entity classification best suits which business is not an easy question to address, as different businesses reflect different tax, legal and growth considerations. However, small firms in the state of Delaware may benefit most from registering as a Limited Liability Company.
Unlike corporations, LLCs provide a greater degree of freedom regarding a business' internal structure, which is also the case if one were to form an LLC in New York State, for example.
"In (a Delaware) LLC … the members are free to organize the LLC in whatever manner they choose," writes Brett Melson in the Harvard Business Services Blog, "with near-total freedom to define the relationship among the members and the terms governing the operation of the entity."
The state of Delaware also permits the creation of a Series Limited Liability Company, which establishes a chain of independent LLCs, each with their own protective status that prohibits the debts, liabilities, obligations or expenses of one to be imposed on another.
Tags : entity types, form an llc, incorporation information, llc
Posted: Mar 10th, 2011