Many Indiana residents have great business ideas. They may have an idea for a product or service that could be beneficial for the masses. However, even when they have a great idea, it may not be as simple as people think to start a business.

If you are considering opening a business, it is important for you to consider your business formation options. Depending on the business entity form that you choose, it could have long-term impacts on the health and success of your business. Therefore, it is important for you to understand your options when choosing a business entity.

One common type of business entity is a corporation. In a corporation, you will usually not be held personally liable for the obligations of the business. Corporations also receive some tax benefits that can save a business money. But, these businesses can be more complicated and expensive to start.

Another common entity form is a limited liability company (LLC). An LLC can also be used to limit your personal liability for company liabilities — including judgments and debts. You can also choose how you want the LLC to be taxed in order try and limit tax obligations. Nevertheless, again, these need to meet certain requirements to be established.

A partnership is another common type of business entity. You can form a partnership without having to pay any fees and they are easy to maintain. You are personally liable for the debts of the partnership and responsible for paying taxes on business profits.

These are not the only types of available business entities. Whether people are interested in creating a family-owned business or a multi-national corporation, people need to understand their options. While this post can provide general information, an attorney can give specific legal advice to fit a person’s situation.

Source: FindLaw.com, “Benefits and Drawbacks of Different Types of Business Entities,” accessed on June 14, 2015