There are many forms of entities that a person can choose when starting a business. If there is only to be one owner of the business, the business could be an unincorporated sole proprietor, a corporation, or a limited liability company. We generally recommend that business owners use either the corporate format or the limited liability company format in order to protect themselves from personal liability. The limited liability company does provide additional liability protections, but in certain circumstances there may be tax and other reasons why the corporate form may be better. We discourage people from being sole proprietors as this leaves personal assets open to liability claims that arise from their business and vice versa.
If there is more then one owner of the business, a corporation, limited liability company or limited liability partnership should be used to avoid the business being treated as a partnership. In partnerships, the partners are personally liable for the business debts incurred by their partners on behalf of the business. Shareholders in a corporation and members of a limited liability company are not personally liable for any of the debts of the business or debts that the other owners of the business incur on behalf of business. Furthermore, the corporation or limited liability company as the case may be, is not liable for the personal debt of the shareholders or members.
If you would like more information regarding which business entity is appropriate for your new business, please contact Massachusetts business lawyer, Attorney Michael Doherty to discuss your options.
Our business attorneys represent clients throughout Massachusetts and in every county of Massachusetts including Norfolk County, Suffolk County, Worcester County, Bristol County, Middlesex County, Plymouth County, Hamden County, Essex County and Barnstable County. Our business attorneys represent clients in Massachusetts’ largest communities including the cities of Boston, Worcester, Springfield, Lowell, Cambridge, Brockton, New Bedford, Fall River, Lynn, and Quincy. Our law offices are located in Franklin and Medfield and our business lawyers serve the neighboring towns of Bellingham, Milford, Upton, Hopedale, Holliston, Medway, Millis, Medfield, Norwood, Walpole, Sharon, Foxborough, Wrentham, Easton, Mansfield, Norton, Raynham, Tauton, Attleboro, Seekonk, Rehoboth, Uxbridge, and Whitinsville.