Entity Formation & Structure
How you structure your business determines how you pay taxes, how investors can participate, and how liability flows if something goes wrong. Get it right from day one.
Every business needs a legal home — a formal entity that holds the business's assets, enters into contracts, employs people, and shields its owners from personal liability. Choosing the right type of entity and setting it up correctly is one of the most consequential early decisions a founder or business owner makes. The Rhodes Law Firm helps clients evaluate their options and form their entity the right way.
Entity Types: What You Need to Know
Limited Liability Company (LLC)
The most flexible structure for small businesses and owner-operated companies. Offers personal liability protection and pass-through taxation. Operating agreements can be customized extensively. Not ideal for companies planning to raise venture capital.
C-Corporation
The standard for venture-backed startups. Allows multiple classes of stock, stock option plans (ISOs), and is the structure most investors expect. Subject to double taxation, but often managed through planning. Delaware is the most common formation state.
S-Corporation
A pass-through tax election available to eligible corporations. Limits on shareholders and share classes make it less flexible than an LLC or C-Corp for growing companies, but it can be tax-efficient for certain small businesses.
Benefit Corporation (PBC)
A for-profit entity that includes a public benefit purpose in its charter. Available in Louisiana and many other states. Useful for mission-driven companies that want to formalize their social or environmental commitments.
Beyond Formation: Governance Documents
Forming an entity is just the first step. Well-drafted governance documents — operating agreements, bylaws, shareholder agreements — are what actually define how the company operates, how decisions are made, and what happens when owners disagree. We draft these documents to reflect your specific business, not just a generic template.
Louisiana vs. Delaware Formation
Many clients ask whether they should form in Louisiana or Delaware. For local businesses without plans to raise institutional venture capital, forming in Louisiana is usually simpler and more cost-effective. For startups that plan to raise VC, Delaware C-Corp formation is typically expected by investors. We help you evaluate the trade-offs and form in the state that best serves your goals.
Authoritative Resources
Start With the Right Structure
Schedule a free consultation to discuss which entity type best fits your business and goals.