Menu Contact
Tilford Dobbins & Schmidt, PLLC
Call
502-584-1000
For A Consultation
Practice Areas Menu

Business formation types that limit personal liability

How you establish your small business has far-reaching effects. It ultimately plays a role in everything from how you stay compliant to how you pay business taxes. While there are several different elements you should consider before determining what type of business structure may serve you best, there are certain types that may prove better for you if you are looking to protect your personal assets.

More specifically, some business types offer more protection for your personal assets than others, meaning that, if someone sues your business, you are not going to have to worry about potentially losing your home, car and so on. Instead, certain business types help you draw a clear line between your business and personal assets, thereby protecting them against potential lawsuits or judgments. Thus, if limiting your personal liability is a serious concern for you, consider establishing one of the following business types:

The limited liability company

Any business, regardless of industry, has areas in which others could attempt to hold it liable. Establishing your organization as a limited liability company extends you some protection in this area. A limited liability company offers certain perks, among them the fact that it is typically relatively easy to manage. However, this business structure also comes with certain drawbacks. For example, you may have a difficult time finding investors for a limited liability company, should you plan to seek some in the future.

The S corporation

Frequently, entrepreneurs who wish to limit their personal liability opt for S corporations, which offer some great tax benefits. Operating and maintaining compliance with an S corporation is a bit more involved than it is with a limited liability company, however, as you must file annual paperwork and maintain an active board of directors, among related compliance requirements.

While you should avoid selecting a business structure based on liability considerations alone, you may want to research these two structures further if limiting personal liability is among your priorities.

No Comments

Leave a comment
Comment Information

Call 502-584-1000 to speak to a lawyer today.

  1. Charles W. Dobbins, Jr.

    Charles earned his J.D. degree from the University of Virginia in 1974

    He was graduated from Washington & Lee University in 1970 with a B.A. with Distinction

    Read More

    Mark W. Dobbins

    Mark earned his B.A. from Emory University.

    He earned his J.D. from the University of Louisville.

    Read More

    Patrick T. Schmidt

    Patrick earned his B.S. in Accounting from the University of Kentucky in 1989.

    He earned his J.D. from the University of Kentucky in 1992.

    Read More

    Terrence L. McCoy

    Terry earned a B.A. from Dartmouth College in 1964.

    He earned his J.D. from Duke University in 1967.

    Read More

    Lisa Koch Bryant

    Ms. Bryant has extensive commercial litigation and bankruptcy experience. Prior to entering private practice, Ms. Bryant served as head of litigation for the Federal Land Bank of Louisville.

    Read More
  2. Wm. Stephen Reisz

    Thomas graduated from the University of Louisville Business School with a B.A. in 1973

    Thomas earned his J.D. degree from the

    Read More

    Sandra F. Keene

    Sandra earned her Bachelor of Health Science degree, with Honors, from the University of Louisville in 1982.

    She earned her J.D. degree from the

    Read More

    Elizabeth M. Jenkins

    Colgate University, B.A., Political Science, magna cum laude, 1983

    University of Virginia, J.D., 1992

    Read More

    Edward L. Galloway

    Ed graduated from Indiana University in 1967 with a degree in history.

    After obtaining a master’s degree in political science from the University of

    Read More

    Thomas G. Karageorge

    Thomas graduated from the University of Louisville Business School with a B.A. in 1973

    Thomas earned his J.D. degree from the

    Read More
  3. Tacasha E. Thomas

    Tacasha attended Harvard University in Cambridge, Massachusetts during the summer of 2001, where she studied courses in law and psychology.

    Read More

    Ayala Golding

    Ayala received her J.D. in 1994 from the University of Louisville, Louis D. Brandeis School of Law, Louisville, Kentucky, where she was a member of the Brandeis Family Law Journal, and

    Read More

    Kacie A. Wilkinson

    Kacie A. Wilkinson recently joined Tilford, Dobbins & Schmidt, PLLC, where she practices in the areas of business law & transactions, real estate, estate planning and probate.

    Read More

    Gwendolyn Chidester

    Gwen recently joined the Firm after being employed by notable Louisville companies for over 15 years in a variety of capacities including Corporate Counsel, Director of Human Resources, and Risk Manager.

    Read More

    William A. Buckaway, Jr.

    Bill earned his B.A. from Centre College in Kentucky in 1956.

    He earned his J.D. from the University of Louisville in 1961 where he was a

    Read More

    Terrell L. Black

    Terry earned a B.S. in Social Science from Campbellsville College in 1966.

    In 1969, he attended graduate school at Eastern Kentucky University focusing on

    Read More

    John A. Wilmes

    John was admitted to the Kentucky bar in 1977 and admitted to practice before the U.S. District Court, Western District of Kentucky in 1979.

    Read More

Contact Us

401 West Main Street, Suite 1400
Louisville, KY 40202

Phone: 502-513-0600
Phone: 502-584-1000
Fax: 502-584-2318
Louisville Law Office Map