Entity Selection Minnesota Business LawWhen you decide to start a business, it is important to decide what type of business entity to select. The purpose of having a business entity, with the exception of a general partnership and sole proprietorship, is to provide limited liability and make it easier to do business. Limited liability means that an owner, member, partner, or shareholder is not personally liable for the liabilities of the business and are only liable to the extent of their investment in the business. However there are some exceptions to limited liability that you should consult with your attorney about.
The types of entities available in Minnesota are the corporation (Inc.), limited liability company (LLC), partnership, limited liability partnership (LLP), limited partnership (LP), limited liability limited partnership (LLLP), business trust, and the sole proprietorship. Both the partnership and sole proprietorship do not provide limited liability.
There are many considerations when selecting a business entity. Ownership, governance, business objective, tax structure, and transferability of ownership are just some of the considerations to take into account when selecting an entity.