Posted by Adam G. Slote - August 7, 2009
The main reason for setting up a corporation, S Corporation or limited liability company (LLC) is to protect investors from the company’s liabilities. So, when you are close to accepting investments or entering into contracts on behalf of the company, it is time to establish the company as a legal entity (corporation, S corp. or LLC). Another reason to establish a corporate structure (or limited liability company) is to make the rights of founders and employees clear and to establish a tax basis in founder’s stock.
This article may be out of date because of changes in the law, changes in government practices or changes in our approach to a particular situation. It also may contain errors, so you should not rely on it in making decisions.