Entity selection involves choosing the appropriate legal structure for a business, considering factors such as liability protection, tax implications, and ownership structure. Common entity types include sole proprietorships, partnerships, limited liability companies (LLCs), and corporations, each offering different benefits and drawbacks. Sole proprietorships are simple but offer no liability protection, while partnerships allow for shared ownership but may expose partners to liability. LLCs combine liability protection with flexibility and pass-through taxation, whereas corporations provide strong liability protection but may face double taxation. Restructuring, on the other hand, involves changing the existing legal structure of a business to better align with its evolving needs, such as expansion, succession planning, or regulatory compliance. This process may include mergers, acquisitions, conversions, or changes in ownership or management structure, all aimed at optimizing the business’s operations, finances, and legal standing.
