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Establishing the Business Entity

When using asset protection strategies to limit liability in your business structure, one of your first decisions involves choosing an organizational form, most likely a corporation or limited liability company (LLC).

Corporations and LLCs are formal legal entities, and forming these entities is done by filing articles of organization and various registrations, as well as by paying fees to the appropriate state agencies.

In addition, sound business planning dictates that a buy-sell agreement and an LLC operating agreement or shareholder agreement be entered into as well, even where it's not required by law.

Of course, other considerations, such as required licenses to operate the business, federal and state tax and employer identification numbers, and various legal issues need to be addressed when establishing the business entity.

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