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When is a corporation the right choice for a business structure?

| Oct 2, 2020 | Business Formation

One of the many decisions necessary at the launch of a new Massachusetts company is determining what type of structure is ideal. For specific types of businesses, a corporation is the structure that will best suit objectives, needs and operational plans. By choosing a corporation, the company will be a separate legal entity from the owner. There are different types of corporations, and the right choice depends on issues regarding potential personal liability, taxation and more.

There are a few reasons why a Massachusetts business would choose a corporation as its structure. One of the main reasons is that a corporation limits the personal liability of the owner. It’s easier to transfer ownership of a corporation than other types of businesses if it is sold to another party in the future. Owners of a corporation will have better access to capital, and there may be some tax benefits available to corporations.

While there are benefits associated with this option, there are some potential drawbacks as well. In certain situations, this could be a costly and time-consuming choice. There is a lengthy application process associated with setting up a corporation as well. Depending on the type of corporation chosen, it may result in heavy taxes.

When considering options for a business structure, it is helpful to speak with a Massachusetts business law attorney. A careful assessment of the individual needs and goals of the company can determine if a corporation is the most appropriate choice for a business structure. When making these types of choices, it is prudent to consider both long-term needs and objectives.