Updated: Dec 22, 2021
What if you could do business and something could go terribly wrong within that business, yet you wouldn't be personally liable. That's what liability protection is. Your personal assets are not subject to the liability of whatever might happen to your company.
2. MONEY IN
Considering how much money you need to start a project or a company, may have an effect of which type of entity you use. There are many questions lawyers might ask you to have a clear understanding on how you want to account for those initial contributions, which is really important.
3. MONEY OUT
Figuring out what the agreement is between you or your partner(s) such as: Who is making decisions regarding the money coming back out? For example, how are you going to handle your budget? Having clear expectations of who makes those decisions is going to help you.
Who's going to run the company? Whether it be a corporation, an LLC, a limited partnership, or any partnership - who's in charge? What kind of powers does that person have? What happens when something changes, goes wrong, or shifts? How do you appoint a new manager? Use this as a way to differentiate which type of entity might be best for you and your business.
5. TAX STRATEGY
What tax consequences will your entity choice leave you with? The main difference here is the corporate tax structure vs. the partnership tax structure. What's going to be the best fit as far as tax structure?
6. EXIT STRATEGY