Entrepreneurship is not just for the young at heart. In fact, many businesses and startups today are initiated by those considered middle-aged. However, no matter a person’s age, the reality is that the same steps are required to form a business. Nonetheless, for those seasoned in the business environment, it may be more lucrative and beneficial to consider three entity types when forming a business.
Forming a limited liability company
A limited liability company and an LLC is an entity that provides owners with liability protection. This means that a separation is created when it comes to business assets and the personal asserts of the owners. In other words, personal assets, such as a home and vehicles, are protected in the event of any liability issues. Depending on the needs and the goals of the owner or owners, there are three different structures to consider. This includes a single-member LLC, member-managed LLC and manager-managed LLC.
A nonprofit corporation is not the same as a nonprofit. A nonprofit corporation is one that is founded for a charitable purpose. This means that they can typically file for a 501(c)(3) exemption, meaning that because a corporation is pursuing a nonprofit mission, it could be exempt from paying federal and state taxes. Obtaining this status makes it easier when it comes to securing grants and donors.
Certified B corporation
This type of business is one that pursues a higher standard of purpose. While it still earns a profit, meaning it is not a nonprofit corporation; it upholds specific social or environmental missions. When deciding to form a certified B corp, it is not as simple as it is to form an LLC. Forming this type of business structure requires one to take the B Impact Assessment test and taking the time to determine if any changes are needed to meet the legal requirements for this business type.
No matter what business type an individual decides to form, it is important to not only be aware of one’s options but also to be fully informed of the costs and benefits of each type. This could help ensure a successful that is well protected.