The importance of business formation

Business formation is the process of choosing and creating a legal structure for a business, such as a sole proprietorship, a partnership, or a limited liability company (LLC)1. Business formation is important for several reasons, such as:

• It affects how much you pay in taxes, your ability to raise money, the paperwork you need to file, and your personal liability2.

• It protects you from liability, to save money on taxes, to create structured business operations, and to build a solid foundation for your business1.

• It contributes to economic dynamism by injecting competition into markets and spurring innovation3.

• It marks the transition from a concept to a legally recognized entity4.

Therefore, business formation is a pivotal step for entrepreneurs who want to succeed in their ventures.

Learn more

1peytonlaw.com2fasttrac.org3kauffman.org4findlaw.com

• What are the different types of business structures?

• How do I choose a legal structure for my business?

• Can you explain more about personal liability in businesses?

We help you answer all these questions and more.