For most new companies, either a limited liability company (“LLC”) or a corporation is the right choice. Both protect your personal assets from the business’s debts and liabilities, which is the most important role of a legal entity. LLC’s tend to be simpler and more flexible to manage, with fewer administrative requirements, while corporations have more well defined management and ownership structures.
Generally speaking, if you don't plan to raise money from outside investors and don't plan to do much (or any) transferring of the ownership (“equity”) of the company after you form it, the LLC is the better choice. If on the other hand you plan on selling equity to investors in the future, or creating a stock option plan to incentivize employees or contractors, then a corporation is probably your best bet.
No idea which way to go? An LLC is usually a good choice for a new small business - and you can always convert it to a corporation in the future if necessary.
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