Q: What type of entity should I form?
A: Limited liability companies are the most often selected entity in large part because they are easy to set up, give you great flexibility and do not require the same level of formality as a corporation. However, for businesses that will have investors or some professions, corporations or service corporations may be the right choice. General partnerships and sole proprietorships leave the owners personal assets subject to liability and therefore may not be the best choice.
Q: Once my entity is formed what’s next?
A: You may need to consider licensing/registration. If your work is in a regulated industry like massage, healthcare, barbering, hairdressing, you may need to have a license and your entity may separately need a license.
You may also need a federal and state tax identification number for income tax, sales tax, and withholding if you will have employees.
Q: When should I get my lawyer involved if I am buying/selling a business?
A: Working with a lawyer and accountant early in the process can help you to decide on the proper structure of the transaction and identify issues that might affect the price and what needs to get done to close the transaction.