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Article Date:
February 2017


Word Count:
2281

 

 

Choosing the Right Entity for a Newly Acquired Business (Part 3)


When you buy a business, one of the first things to think about is the legal form you will use to own and operate the activity. The choices range from sole proprietorships to corporations.

 

But if the new business that you acquire becomes part of an existing entity (such as your existing LLC or corporation), you already made a choice. You can use this article to see whether that’s a good choice for you.

 

We covered sole proprietorships, single-member (one-owner) LLCs, and three corporate options in Parts 1 and 2. In this analysis, we cover multi-member LLCs and partnerships.

 

The Multi-Member LLC Option

 

Multi-member LLCs are popular because they combine the best legal and tax characteristics of corporations and partnerships.

 

Specifically, a multi-member LLC can offer limited liability protection to all its owners (referred to as members) while being treated as a partnership for federal tax purposes. The generally favorable partnership tax rules are ... Log in to view full article.

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