• Team
    ▼
    • Philip P. Crowley
    • Christian Jensen
    • Jay S. Pattumudi
    • Anthony Wilkinson
    • David Kanarfogel
  • About
    ▼
    • Technology
    • Life Sciences
  • Services
  • Resources
  • Contact Us
  • Careers
  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Crowley Law, LLC

Crowley Law New Frontier

Call: 844-256-5891
  • Team
    • Philip P. Crowley
    • Christian Jensen
    • Jay S. Pattumudi
    • Anthony Wilkinson
    • David Kanarfogel
  • About
    • Technology
    • Life Sciences
  • Services
  • Resources
  • Contact Us
  • Careers
  • Team
    • Philip P. Crowley
    • Christian Jensen
    • Jay S. Pattumudi
    • Anthony Wilkinson
    • David Kanarfogel
  • About
    • Technology
    • Life Sciences
  • Services
  • Resources
  • Contact Us
  • Careers

Choosing a business entity

4.24.18

If you are launching a business, it’s important to protect your personal assets from the results of the business. You can do this by creating a properly constituted business entity.

You should never start a business or sign contracts in your own name.  Otherwise, you would be putting your personal assets at risk if the business doesn’t work out as you expected. Here is an example of what could happen if you start a business under your own name.

A new life sciences business leases lab space

Suppose you lease lab space for your new venture. The landlord asks you to sign a three-year lease. You sign the lease using your personal name, pleased to obtain desirable space at a competitive price.

After one year, however, the venture doesn’t work out as you hoped, and you decide to close it.  Unfortunately, because you signed the lease in your own name instead of in the name of a business entity, you are personally responsible for rent payments for the entire three-year term of the lease.   If you had signed the lease using the name of your business entity, you would not be personally responsible for the rent payments.  The business entity and its assets would be required to bear the liability.

Protecting you from liability

A properly constituted business entity can protect you from liabilities associated with a business such as creditors and lawsuits. Both limited liability companies and corporations provide a corporate shield to protect you from liabilities.

An LLC is easier to set up and maintain than a corporation and, subject to some restrictions, allows business losses to flow through to the owner so they can be deduced from the owner’s personal income tax. An LLC also has fewer corporate formalities than a corporation.  At some point in the future, however, you may want the benefits of a more formal corporate structure to make your venture more attractive to investors.

To ensure you get the maximum benefit of your business entity, you should always seek the help of an experienced attorney.  The cost of competent legal advice is usually less than the cost of dealing with a situation that hasn’t been properly structured.

Primary Sidebar

Depend on us to keep you informed with our monthly newsletter and invites to informative webinars and seminars.

Select list(s) to subscribe to


By submitting this form, you are consenting to receive marketing emails from: Crowley Law LLC, 89 Headquarters Plaza, Morristown, NJ, 07960, https://www.crowleylawllc.com/. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Privacy Disclaimer

Footer

Crowley Law LLC
Business & Technology Attorneys


Phone: 844-256-5891
Email: [email protected]
New Jersey Office | New York Office
About | Services | Resources & Events | Contact Us

Awards Disclaimer

Copyright © 2023 by Crowley Law LLC.
All rights reserved. Terms of Use / Privacy Policy | Sitemap
Attorney Advertising. No aspect of this advertisement has been approved by the Supreme Court of New Jersey.
Website by New Frontier

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish.
Cookie settingsACCEPTREJECT Read More
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT