S1, Episode 7: Entity Formation

Season One, Episode Seven– An introduction to some of the main forms of for-profit business entities, a comparison of their similarities and differences, and the five main considerations entrepreneurs should keep in mind when choosing an entity.

Episode Description: Edward Kim (Fordham Law ‘19) and Geoffrey Kelly (Fordham Law ‘18) join to discuss considerations for choosing and forming a for-profit business entity.  Topics include financing, ownership and operations, personal liability, taxes, and the formation process.  Ed and Geoff share a step-by-step example of a new business entity formation to assist entrepreneurs in this process.

Episode Roadmap:

  • [:31] Edward Kim and Geoffrey Kelly introduce themselves as Fordham Law students under the supervision of Professor Bernice Grant.
  • [1:45] Main considerations when choosing an entity include financing, ownership and operations, personal liability, taxes, and the formation process.
  • [2:24] What every new entrepreneur needs to consider regarding how financing impacts choosing a business form.
  • [6:42] Ownership and operations considerations for an LLC, partnership, and C- and S- Corporation.
  • [11:25] The main differences and benefits of a Benefit Corporation versus a C- or S-Corporation. Clarification of how Benefit Corporations differ from Certified B-Corps.
  • [14:43] Ways entrepreneurs can protect themselves from liability, requirements to maintain limited liability protection, and importance of business insurance.
  • [17:24] Tax requirements and considerations for each entity type.
  • [20:03] The formation process, associated costs, and which state to form your business in.
  • [22:08] A step-by-step hypothetical example of a new business entity formation.
  • [25:36] Key takeaways and considerations for entrepreneurs when faced with a new business entity formation.

Tweetables:

“The key is to prioritize your needs as the entrepreneur and to pick the business type that best suits those needs. Often those considerations can be narrowed down to five things--financing, ownership and operations,…
“Venture capital funds and angel investors will be much less likely to invest in an LLC or a partnership than a corporation.” -Edward Kim
“No matter what business type you choose to form, you’re going to have to register it with the state to make it official.” -Geoffrey Kelly

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Disclaimer: The information contained in the Startup LAWnchpad Podcast and any materials associated therewith (the “Podcast”), is for educational and informational purposes only. The Podcast does not constitute legal advice or tax advice with respect to any particular circumstance. The Podcast is not a complete overview or analysis of the topics presented, and may contain information that varies in different jurisdictions and that is subject to revision, interpretation, or nullification after the date of recording. The transmission of information to you does not create a lawyer-client relationship between you and any host, guest, or their respective employer, including but not limited to Fordham University School of Law and Lincoln Square Legal Services, Inc. None of these parties shall be liable for any loss that may arise from any reliance on the Podcast. You should not rely upon the Podcast or treat it as a substitute for legal advice. You should consult a lawyer familiar with your particular circumstances and licensed in your jurisdiction for legal advice.

Startup LAWnchpad is a new podcast that helps bridge the gap between entrepreneurs and their legal needs.  This podcast is a series of virtual legal workshops that will educate entrepreneurs about legal issues they commonly face as they develop, launch and grow their business.