The selection of the form of business entity will have a variety of consequences during the life of the business. For example, it may affect whether the business owner will be liable for the obligations of the business; it may influence what assets the business owner will transfer to the business; and it will determine to a great extent whether the business will continue to operate after the business owner has ceased to participate in it. It is therefore necessary to consider both the short-term and long-term goals of the business, and the nature of the business itself, in order to determine the form of legal entity best suited for the operation of any given business.
Start-up businesses may be conducted as a sole proprietorship, a general or limited partnership, a joint venture, in a corporate form, in one of several forms of special business structures, such as professional corporation, or as a limited liability company.
There is no one form of business entity that fits all businesses. Whether new business owners should use partnerships, corporations, or limited liability companies (or other forms of organization) in the operation of their businesses depends on various factors. Below is a sample listing of the more popular business forms available in Illinois.