Although not a formal prerequisite to operating a business, forming a business entity is essentially a must for every business owner. Limited liability is a key aspect in any business operation to shield your personal assets and estate from any debts/obligations of the business. Moreover, it is often the case that banks or vendors will require that you submit your Articles of Organization, Bylaws, Corporate documents, etc. for their file so they know you are a legitimate business enterprise.
More technically, you have a legal business entity and your tax entity. They do not always have to be the same thing. A limited liability company can be taxed as a sole proprietorship or a Sub-chapter S Corporation. It all depends on the nature of the business, the owner(s) specific objectives, and how many owners/employees the business has.
Given that business formation is case-specific, it is impossible for any attorney to give categorical guidance. Depending upon the circumstances, a Limited Liability Company, Corporation, Professional Corporation, Limited Partnership, Limited Liability Partnership, etc. may suit your business needs.
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