The tax and business attorneys at Powell Goldstein have substantial experience advising clients regarding choice of entity and entity structure. Each type of entity has its own unique advantages and disadvantages. The choice of entity and entity structure decisions for a business enterprise are made on a case by case basis after taking into account the specific tax and business needs of the enterprise and other unique aspects of the business enterprise and its owners.

Taxation is of primary concern in the organization of any business enterprise. Both the federal and state tax consequences to the organization and its owners must be considered. Many other factors and consideration also must be taken into account by entrepreneurs and legal counsel in making an informed decision regarding choice of entity and entity structure.

Such factors include, among others, the following:

• the type of business or businesses to be conducted; the location or locations of the business and business activities
• the type and number of owners and relationship among owners
• the type of income to be generated from the business activities and potential applicability of self-employment taxes
• the manner in which the owners will share profits and losses from the business and the ability of owners to utilize tax losses
• the plans for growth and expansion of the business enterprise
• anticipated exit and business succession strategy for the owners of the business
• the need for dispute resolution mechanisms
• the anticipated needs of the business with respect to management structure
• the initial and future anticipated capital needs of the business and sources of such capital needs
• the need to provide flexibility in connection with equity compensation to employees or other types of employee compensation as well as employee and owner benefit plans