Indiana law offers a wide variety of legal entity choices from which new businesses can choose, depending on goals.
In the economic recovery, Indianans will continue to open new businesses of all sizes, from mom-and-pop small businesses to large concerns and everything in between. A key, early decision is to decide which kind of legal entity will likely be best for the particular business, considering all of its goals.
Important factors to consider impacted by the type of business entity include:
- Tax matters, especially whether the owners or founders will be liable for taxes or the business will be its own tax-paying entity
- Control and management of the business
- Liability for debts and obligations of the business, including whether the owners and founders and their personal money and assets will be personally at risk to pay business liabilities
- And more
State law establishes and regulates the available types of business entities for new business startups, although state and federal tax laws are also considerations. A business entity choice will almost always require weighing the pros and cons of the various options in light of the unique aspirations of the business.
Choices of business entities in Indiana include:
- Sole proprietorship: one person setting up shop without needing a formal business structure, the most common business type
- Corporation: a fictitious entity that is liable for business and tax debts, rather than the founders
- Partnership: formed by two or more people doing business for profit, generally splitting management control and personal liability; variations include limited partnership, limited liability partnership and family limited partnership
- Limited liability company or LLC: a blend of the features of partnerships and corporations
- Joint stock company
- Business trust, including the real estate investment trust or REIT
- Joint venture: a business concern set up for one commercial project rather than for ongoing operations
- Professional corporation
- Nonprofit corporation
- And others
It is imperative that anyone in Indiana considering opening a business consult with an experienced business attorney to provide education and advice about the various legal entities available. Legal counsel can help such a client analyze the choices vis-à-vis the goals of the business.
Once a decision is made, the business law attorney can prepare the required documents and government filings, which can be extensive. Such documents may include internal operating documents and agreements; and government filings to cover matters like establishment of the legal entity, registration of an assumed name, state and federal tax filings and more.
From offices in Fort Wayne and Bloomington, the business formation attorneys of Carson LLP help businesses of all sizes across the state of Indiana with business formation and legal entity choice as well as with a wide range of business matters.
Keywords: Indiana, legal entity, new business, business entity, tax, control, management, liability, startup, sole proprietorship, corporation, partnership, limited liability company, LLC, attorney