Legal Basics: Choosing the Structure that Suits Your Business
Though you’d be surprised how many food entrepreneurs are former lawyers, the task of forming a legal business entity is generally a foreign process to most people starting in F&B businesses. While your local small business association can likely walk you through the process of forming an entity, it’s a good idea to go into the process with an idea of what you’d like to become.
LLC? S-Corp? If these words just look like a bunch of nonsense to you, you’re not alone. This article from The Balance takes you through a brief intro of each of the main types of business entities (though the article is about retail, it’s fully applicable to food business owners as well).
Making the decision from an accounting and payroll perspective can be tough if you aren’t sure what exactly each type of entity entails. This helpful blog post from Local Economy Maine gets a bit more in the weeds, for when you’re choosing between different entities and what to know what it might mean for your P&L.
Daunting as it may seem, forming a legal entity is a step that every single business goes through – and there are not so many options that you can be too overwhelmed. In some cases, you can even change your mind down the line. So don’t fret! Go get legal.