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Choice of Business Entity: Pros and Cons of Corporations and LLCs
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Choice of Business Entity: Pros and Cons of Corporations and LLCs

When launching your startup, there’s no shortage of big decisions to make, but one of the most impactful at the early stages is choosing the right legal structure. Choosing the right form of entity lays the foundation for how your business will be taxed, your process for raising institutional capital, and the treatment of your expected return upon exit. The three most common types of entities are C-Corporations, Limited Liability Companies (LLCs), and S-Corporations. For most founders who intend to raise outside capital from traditional venture capital funds, a C-Corporation is most common. However, LLCs and S-Corporations provide their own unique tax advantages that may be more appropriate for certain businesses. This article provides a summary of some of the pros and cons of each entity and factors to consider as you determine which entity may be the right fit for your new venture.  Consulting with a legal advisor to assess your specific situation is essential.

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