What is the Best Legal Structure for Your Start-Up?

What is the Best Legal Structure for Your Start-Up? | Bettina Eckerle

Some of the questions I get asked by my start-up clients are perennial in nature, with the most common being: Do I have to form a legal entity, and if so, what kind and why? Entrepreneurs have a number of legal structures available when seeking to capitalize on a million-dollar idea. Each type of entity has distinct advantages and disadvantages that I discuss below, and the decision should be tailored to your individual situation. The choice will impact the amount of tax you pay, the amount of paperwork you are required to do, the personal liability you face, and your fundraising activities. While there are a number of different kinds of entities, I am focusing here on the most common—the sole proprietorship, the LLC, the S-Corporation and the C-Corporation.

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