For Business Owners
Which business entity should I choose?
The entity you choose shapes how your business is protected, taxed and run. We help you select a structure that fits your goals and protects your interests.
The right vehicle for the road ahead
Owning your own business is one of the American dreams. You have thought about what you want to do and how to put your plan into action. Equally important is the kind of entity you choose for your business.
Choosing an entity is like choosing the right vehicle for a job: you want the one that fits the road ahead. Talking with a business law attorney about your options can help you make the decision that fits your new or changing business.
We work closely with our business clients to understand the issues they face. We also connect with our clients' trusted advisers, including CPAs and financial planners, so that all of your advisers are working from the same page.
Common business entities in Tennessee
Tennessee offers several types of business entities, each with its own functions and benefits. Some of the most common are:
- Limited liability company (LLC): a separate entity from its owners. If properly established and maintained, an LLC can shield its owners from liability while giving them the tax treatment of a partnership or sole proprietorship. It does not carry the director meeting and shareholder requirements of a corporation.
- Limited liability partnership (LLP): like an LLC, a combination of a partnership and a corporation. It offers some of the protections of a corporation without all of the same requirements. Profits and losses pass through to the partners for income tax purposes.
- Sole proprietorship: owned by an individual or a married couple, it offers the greatest flexibility. The main drawback is that the owner is personally liable for all of the business's debts.
- General partnership: formed by two or more partners. As with a sole proprietorship, all partners are liable for the debts of the partnership.
- Corporation: a more complex structure. Owners have some protection from the debts and losses of the company, but the government imposes more rules and requirements on corporations. A corporation may also create tax advantages for its owners.
Business entity questions
Planning that fits together.
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4Sight Legal Services can help you choose the right business entity. To make an appointment with a lawyer in our Chattanooga office, call 423-305-1704 or contact us online.