FAQ 5. Is it too late to “incorporate” after my business is up and running?

In short, no. Whether a business is operating or not will not prevent it from being organized as a corporation, limited liability company, or other limited liability entity. In fact, even after a business is organized as one type of limited liability entity, it is possible to change its form to a different type (albeit with consideration of the potential tax consequences of such a restructuring).

Clients should know, however, that early stage organization is often far more cost-effective than electing to form a limited liability entity after business operations have begun. Once bank accounts have been opened, contracts executed, and employees hired, restructuring from a sole proprietorship or partnership to another form will require additional, legal and administrative steps to attain the liability protection the client seeks.

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