Legal Question in Business Law in New Jersey

A limited liability company is the most flexible form of organization for both tax and business purposes. Most likely that would be a smart choice. First, if set-up right by a good tax and business lawyer, the LLC can add a layer of protection which can insulate your personal assets from business liabilities. (Please note this is not perfect and if you personally perform an intentional act, or have personal responsibility - such as driving a company-owned vehicle and getting into an accident, you will have personal liability.) Since you are a manufacturing company, you can have product liability and you certainly do not want to be a sole proprietor.

The LLC can be established to be a disregarded entity for Federal Tax purposes. This means you would file a Schedule C with your 1040 Income Tax Return, the same as a sole proprietorship. When you start a new business, you should always obtain legal advice, so the cost of forming an LLC versus a sole-proprietorship is well worth the cost.

I hope this helps!

Ron Cappuccio

This can be a big question with many considerations. Generally, in most cases when one is asking the question an LLC will be the best fit, but not always the case. You are advised of course to set up a liability shield like an LLC or INC so there is a legal distinction between you and the business.

The best thing you can do now is to call around to some attorneys for phone consults and pick the best fit to work with. You will have a number of legalities to consider as you move forward.

If you would like to discuss further over a free phone consult, feel free to contact me anytime that is convenient.

Kind regards,

Frank

www.LanternLegal.com

866-871-8655

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DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed on the basis of this posting.