In this chapter you will learn various entity choices, meaning, the kind of corporation or type of ownership you may wish to select. Keep in mind that each entity choice has some advantages and some disadvantages. The best thing is to understand the various choices and then select the best that fits your need. Except for the sole-proprietorship, each is considered a separate unit from the founding owners, meaning, the entity is a separate body than the initial investors or owners. For all practical purposes this separateness must be maintained to avoid unintended consequences.

Unfortunately, many small business owners- after setting up the corporation- do not follow the corporate protocol. The following is a check list that is a must, in order to be kept in mind and to sustain any legal challenge to your corporate entity:

Start with an initial stockholder(s) meeting
Select the initial officers of the board
Maintain proper accounting of the company’s resources
Do not mingle personal assets (cash/other properties) with that of company’s assets
Record the corporate minutes

All these items will be discussed in detail later in this chapter. First just understand the type of entity, purpose for forming such, its advantages and disadvantages of each type, and how to form entity of your choice.

1. Sole Proprietorship
2. Partnership
3. Corporation
4. Limited Liability Company (LLC)
5. S-Corporation
6. The Next Step

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