Hi
can you tell me if i am opening a videogame company. What will be my LLC, reason for selecting that entity.
Go over the pros and cons for a business to select an LLC over the other possible business entity types. Then ask, what business entity type is most suited for a upstart videogame company. And then you will have answered your question.
i don't understand
ok. First list the other possible business entity types. You could have: a) a sole proprietor, b) a general partnership, c) a limited partnership LP, a limited liability partnership LLP d) a limited liability corporation LLC, or d) a corporation. (We can throw a farm right out).
next.
Rather than me listing the advantages/disadvantages, if found this web site that summarizes fairly well.
ct-clic (period) com / business / entity_definitions (period) h t m
One area not discussed in the web site is the ability of each type to raise capital. By issuing and selling shares, corporations can generally raise more money than non-corps. However the profits then need to be more broadly distributed.
Thats enough for now.
Based on the information provided, an LLC (Limited Liability Company) may be a suitable business entity for an upstart video game company.
To evaluate if an LLC is the best choice, let's consider the pros and cons of selecting an LLC over other possible business entity types:
1. Sole Proprietorship: A sole proprietorship offers simplicity in terms of operations, but it doesn't provide personal liability protection or separate legal entity status. This makes it a less favorable option for a video game company.
2. General Partnership: Similar to a sole proprietorship, a general partnership lacks personal liability protection and limited legal liability. It may not be the best choice for a video game company due to potential risks involved in intellectual property and liability issues.
3. Limited Partnership (LP): While LPs provide limited liability to some partners, they also have general partners who bear unlimited liability. This structure may not be ideal for a video game company seeking broader personal liability protection.
4. Limited Liability Partnership (LLP): LLPs offer liability protection to partners, similar to LLCs. However, they are primarily designed for professional service firms (e.g., law firms, accounting firms) and may not be the most suitable option for a video game company.
5. Corporation: Corporations provide strong personal liability protection, but they tend to have complex legal requirements and formalities. Additionally, corporations may face double taxation on profits. However, they can benefit from easier capital raising through the issuance of shares.
Now, considering the nature of an upstart video game company, the limited liability protection, flexibility in management structure, and pass-through taxation features of an LLC make it a favorable choice.
To better understand the pros and cons of each business entity type, I recommend visiting the website ct-clic.com/business/entity_definitions for detailed information.