Entrepreneurship and Small Business Management

Section 2: Corporations

Section 7.2 Summary
In a corporation, the owners are protected from the actions of the company. Corporate forms include C-corporations, Subchapter S corporations, and nonprofit corporations. Because corporations can be complex to create and operate, an attorney should guide the entrepreneur through the process. This includes the filing of a Certificate of Incorporation with the state and issuing of stock. In a limited liability company (LLC), the owners and managers enjoy limited liability and some tax benefits, but they avoid some restrictions associated with Subchapter S corporations. Before deciding on a legal form, you should ask yourself key questions about your skills, capital, expenses, and ability to assume liability, and about the level of control you want and the length of time you expect to own the business.

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