Business Transactions

Choosing A Business Entity Form For Maximum Respect

There are many important factors to consider when selecting the best business entity form for your company. The need for respect isn’t one of them.

I Don’t Get No Respect

I have heard the view that professional corporations are considered bottom shelf in New York. I have also heard the fear that sole proprietorships are not taken seriously. I don't understand the rationale of looking down on a business due to whether it’s a corporation, LLC, professional corporation, sole proprietorship, or some other form.

A Well-Run Company Will Earn the Respect of Those Who Matter

Here's a news flash. People who don't take your company seriously just because you’re organized as a sole proprietorship will not take you anymore seriously just because you become a single-member LLC. And I question the value of anyone’s respect who bases giving respect on which letters – whether they be Inc., LLC, PC, or d/b/a - follow your company name.

The ideal entity form is not the same for every company. The choice should be driven by the need for limited liability, tax treatment, ownership structure, financing options and other hard-core business considerations.

Respect for one’s business should be based on whether you run a professional operation. If you want your business to be well respected, provide your customers with value, follow through on professional commitments, pay your bills on time, keep your records impeccably, and act with integrity.

I'm Quoted in Entrepreneur Magazine

The March 2009 Entrepreneur Magazine quotes me in a feature on start-ups. The feature carries the tagline “Time to launch a business and get out from under the man”. I contributed to the section entitled “Dodge these 3 startup dead zones” advising entrepreneurs on how to avoid the most common start-up mistakes.

My advice was to choose the right business partners by making an honest assessment of what you want from the business partnership, discussing expectations candidly with your prospective partners, and putting your agreement in writing.

I covered more on the topic of successful business partnerships in a StartUp Bizcast interview with Steve Mullen which you can listen to here.