WHICH BUSINESS ENTITY SHOULD
I CHOOSE?

There are several different types of business entities in Tennessee, but they all have various functions and benefits. We can help you learn more about the kinds of entities that are available and what the best fit is for your business.

Some of the most common business entities include:

• Limited Liability Corporation (LLC): An LLC is a separate entity from its owners. If properly established and maintained, the owners of an LLC can be shielded from liability and can have the tax benefits of a partnership or sole proprietorship. An LLC also does not have the same director meeting and shareholder requirements of a corporation.
• Limited Liability Partnership (LLP): An LLP, like an LLC, is like a combination of a partnership and a corporation. It offers some of the same protections of a corporation without all of the same requirements. The most significant difference is when it comes to income tax time. In an LLP, all the profits and losses pass through to the partners.
• Sole proprietorship: A sole proprietorship can be owned by an individual or a married couple and offers the greatest flexibility and fewer taxes. The biggest issue, however, is that the owner is personally liable for all debts.
• General partnership: Two or more partners can form a general partnership. Similar to a sole proprietorship, all partners are liable for any debts of the partnership, but in this case, there can be more than one partner without it being a married couple.
• Corporation: A corporation is a more complex structure. While it is helpful that the owners have some protection from the potential debts and losses of the company, there are a lot of rules and regulations for what the government requires from a corporation. A corporation may create significant tax advantages for its owners