If I would like to start a new small business in the food prep/catering area and Initially will be the only person involved, what type of business structure should I form?
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If I would like to start a new small business in the food prep/catering area and Initially will be the only person involved, what type of business structure should I form?
Can one person even form an LLC?
Asked on November 24, 2014 under Business Law, Indiana
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
Yes, one person can form a LLC--or, for that matter, a corporation. You definitely should establish the business as an LLC or corporation (probably an S-corp) for liability protection: without an LLC or corporation, you would be personally liable for all business debts, or if the business were sued. Between an LLC taxed on a "partnership" basis and an S-corp (both of which are "pass through" entities, so you would avoid double taxation), there is little to choose in terms of either liability protection or tax treatment. For a small business, an LLC is a little more flexibile, a little more informal, and involves less paperwork and reporting, so that's usually the better choice.
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