WHAT IS THE BEST FORM FOR YOUR BUSINESS?

In Michigan, you can opt for several types of business entities.

SOLE PROPRIETORSHIP. If you simply begin operating your business without creating a formal entity, you may save money on incorporation, but your personal assets are at risk if you are sued for a business debt or if you caused harm to another person or business.

PARTNERSHIP. One or more persons operating a business cooperatively creates the assumption of a partnership. Without a formal partnership agreement, Michigan statutory partnership law applies. This can mean that one partner can obligate the other partners to pay for a debt or to satisfy a business obligation.

LIMITED LIABILITY COMPANY. One of simplest forms of incorporation, the limited liability company can help protect your personal assets from business debts or obligations. Another advantage of the limited liability company is that you can opt to be treated as a business for tax purposes, or have the proceeds of the business “flow through” and be treated like your personal assets.

PROFESSIONAL LIMITED LIABILITY COMPANY. Some professionals may only choose to form a professional limited liability company. Lawyers are one example. This form requires that only certain types of business be conducted (i.e., the practice of law), and limits the ability to protect the professionals assets from lawsuits for business debts.

S and C CORPORATIONS. Bigger and more formal companies must choose one of these forms.

- If you would like more information about which form of business gives you the best chances of success, please contact us!