Choice of Entity

When starting a new business, an entrepreneur should carefully select a business form.  California recognizes many forms as valid, including sole proprietorships, partnerships, and several limited liability forms.  Each form has its particular advantages and disadvantages for the formation and operation of the business.  The Burton Law Firm attorneys can help an entrepreneur weigh these advantages and disadvantages and select the best form to help the entrepreneur meet his or her goals. This process is called choice of entity. Factors like duration of the business, management structure, investor participation, tax implications, exit strategies and potential legal liability should all be weighed and considered before selecting a business form.

Through time, a business expands and evolves to meet new challenges.  A growing business faces the task of continuing to provide a quality product or service while dealing with increased recordkeeping, more employees, and higher costs.  Some of the business methods utilized when the company was small prove ineffectual or hinder the operation of a large business.  As the business changes, the business form itself can limit the potential growth and efficiency of the company.  In these situations, the business may benefit by changing form.  Perhaps your business began as a sole proprietorship but now you have several locations and numerous employees.  Perhaps it would be beneficial for your business to include new owners or investors.  A new business form, such as a limited liability company or corporation, may help the business address current difficulties and prepare the company for the future.  A new form can help avoid problems by limiting the liability of business owners, streamlining the decision-making process, and obtaining company tax benefits.

Whether starting a new business or changing the structure of an established business, The Burton Law Firm can help business owners evaluate their options and decide on the business form that suits their needs. Let us help you choose your entity.

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