When you own your own Minnesota small business, you have a lot to potentially lose in the event that someone falls a lawsuit against that business, and if you are not careful when setting it up in the first place, your personal assets could be at stake. At Dunlap & Seeger, we understand that there are certain business structures you can choose when forming your business that can help protect your personal assets, and we have helped many entrepreneurial clients establish business structures that best reflect their needs.
According to QuickBooks, all business owners have areas where someone could potentially attempt to hold them liable, even though there are some types of businesses that are undeniably riskier than others. If protecting your personal assets in the event that someone sues you is a priority of yours, you may want to think about establishing your business as either a limited liability company or an S corporation.
A limited liability company helps shield your personal assets and, as the name implies, it limits your liability. Typically a relatively easy type of business structure to maintain, the limited liability company is a popular option among small business owners. However, if you plan to try to have others invest in your business, you may want to pursue other avenues, such as the S corporation.
An S corporation is a second type of business structure that can help protect your personal assets, and it offers other perks, too, among them pass-through taxation. It takes a bit more effort and attention to run an S corporation, however, and you will need to host annual board meetings, among other efforts, in order to stay compliant. You can find more about business formation on our webpage.