There are generally three types. You have your C corporation, the S-corporation, and the LLC. All three of these provide the liability shield, which means that should a lawsuit arise, only the business could be sued. The officers and owners cannot be sued as individuals. All of them provide the same amount of protection.
The corporation is primarily used if you are going to have many outside investors and shareholders, buying into your corporation to raise funds. The LLC is the most flexible of the businesses, and is really for small businesses. It can also be large businesses, but for people who do not want to go through a large amount of corporate formalities in order to get things done. The S-corp is sort of a mix between the two. It does require corporate formalities and is a good way to attract outside investment. However, it is a little bit more difficult to conduct business and make lightening quick decisions. The best business entity is the LLC, unless you are attracting a large amount of outside investors, in which case the best entity would be the corporation. The S-corp is the best business entity if you’re using it solely as a vehicle for investment and you are a small business and not attracting outside investors.
Lawyers at the law firm of Mattleman, Weinroth & Miller, P.C., are experiencedbusiness attorneys working throughout the state of New Jersey. Contact the office ifyou have legal questions about your business entity structure and set up a free initialconsultation.