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Writer's pictureSam Smith

What business entity should I use?


To answer this question, you have to ask yourself two other questions: (1) Are you going to be the only owner of your new business? and (2) Are you initially investing less than $5,000 into your business? If the answer to these two questions is "Yes" (you are going to be the only owner of your business for the foreseeable future and you are going to start your business by investing less than $5000) you should use a limited liability company.


If you are going to have more than one owner in your business or if you are going to invest more than $5000 to start your business, you are most likely going to use either a limited liability company or a corporation.


If your business plan includes raising capital investment from angel investors and/or venture capital firms then you should plan to use a corporation and you should organize your corporation in Delaware. Otherwise you are probably best suited to use a limited liability company. Obviously there are exception and specific circumstances where other entities might be better but you should probably speak with a business attorney to help you make that determination. In fact, you can submit a question by clicking the link at the end of this post to ask us which entity would be best for your specific business.





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