This resource is general information and is not legal advice. The right approach depends on the facts, documents, and law applicable to a particular matter.
Start with the operating reality
Entity selection should follow the way the owners actually expect the business to operate. Consider who will make decisions, how profits will be distributed, whether outside investment is likely, and what should happen if an owner dies, becomes disabled, or wants to exit.
LLC or corporation?
Both can offer liability protection when properly formed and maintained. LLCs often provide flexibility in economics and governance, while corporations may be a more natural fit for companies that expect institutional investment or a traditional equity structure.
Do not stop at the filing
The formation document is only the beginning. A thoughtful operating agreement or shareholders' agreement should address authority, voting, transfers, buyouts, deadlock, confidentiality, and other issues that become expensive if left ambiguous.