When starting a new company, oftentimes the first question to decide is what type of company entity you will form as. The choices are many and can be confusing, but ultimately all types of entities serve the goal of protecting the company’s owners from personal liability for the company’s debts or actions.
Several of the most common types of business entities you may form under Illinois law are corporations, limited liability companies, limited liability partnerships, and sole proprietorships. An attorney can explain the differences among these various entities, as well as the legal requirements they must comply with to ensure the business owners are as insulated from liability as possible.
A business entity is viewed by the law as a person would be. It is able to enter contracts, pay taxes, sue and be sued. How an owner of the business signs agreements on behalf of the company can be a factor in determining whether that owner is personally liable on the document. Failure to abide by legal requirements of the particular business entity could even mean that the business owner is personally liable in the event the company is sued or goes into debt.
Proper research and planning is crucial prior to going into business, and an experienced attorney can help guide you through the process.
