We noted in a recent Cook Tillman Law Group blog post two distinct business forms that often attract close attention from entrepreneurs and start-up principals in Tennessee and nationally.
Those are corporations and limited liability companies (LLCs), respectively. We stress in our July 1 blog entry that, because “ultimate business success or failure is often determined at company inception,” it is imperative for owners to make the right entity selection for their enterprises.
Business law attorneys with a deep well of knowledge regarding business creation and formation routinely help diverse and valued clients accomplish that key goal.
In doing so, they timely point out the fundamental characteristics of both LLCs and corporations. Company decision makers often see benefits that one form clearly has over the other for their business. Conversely, comparative advantages or drawbacks are sometimes not so immediately apparent.
Here are some things to consider in a corporation-versus-LLC analysis:
- Many principals are attracted to a limited liability company’s relative flexibility and simplicity
- LLCs pass gains and losses directly through to owners, whereas most corporations are taxed in tandem with their shareholders
- Corporations more easily engage in large fund-raising efforts
- Corporations can issue stock
Those bullet points spotlight just a few basic features relevant to corporations and limited liability companies. There can be a number of other considerations as well that business owners will want to closely evaluate en route to reaching a determination concerning entity formation.
An established commercial law team can provide insight into the process and candid guidance concerning related legal matters.