Starting a new business is an exciting venture, but navigating the legal landscape is crucial to protect your interests and ensure long-term success. As a firm specializing in business law, we’ve helped countless entrepreneurs, start-ups and established businesses build solid foundations at Prestige Law Group, PLLC. Here’s a breakdown of the key steps to form a business entity in 2025, with updates reflecting recent regulatory changes.

Choose the Right Business Structure

The first decision is selecting an entity type that aligns with your goals, liability needs, and tax preferences:

• Sole Proprietorship: Simple and low-cost, but offers no personal liability protection. Ideal for freelancers or small operations.
• Partnership: Suitable for multiple owners. Consider a Limited Liability Partnership (LLP) to shield personal assets.
• Limited Liability Company (LLC): Popular for its flexibility, pass-through taxation, and liability protection. In 2025, many states have streamlined LLC filings with digital portals.
• Series LLC: A specialized LLC structure available in certain states (e.g., Delaware, Texas, Illinois) that allows you to create separate “series” within a single LLC. Each series can have its own assets, liabilities, and operations, with liability protection between series. This is ideal for businesses managing multiple ventures, such as real estate investors or entrepreneurs with diverse portfolios. However, not all states recognize Series LLCs, and federal tax treatment can be complex—consult an attorney to ensure compliance.
• Corporation (C-Corp or S-Corp): Best for businesses planning to raise capital or go public. Note the ongoing Corporate Transparency Act requirements for beneficial ownership reporting.

Pro Tip: Consult with a business attorney early to evaluate tax implications under the latest IRS guidelines.

Register Your Business Name and Entity

• Conduct a name search via your state’s Secretary of State website to ensure availability.
• File formation documents: For an LLC, submit Articles of Organization; for a corporation, Articles of Incorporation.
• Obtain an Employer Identification Number (EIN) from the IRS—free and essential for taxes and banking.
• In 2025, enhanced federal reporting under the CTA mandates disclosing ownership details to FinCEN, with penalties for non-compliance reaching $500 per day.

Draft Key Agreements and Secure Permits

• Create operating agreements (for LLCs) or bylaws (for corporations) to outline management, profit sharing, and dispute resolution.
• Apply for necessary licenses and permits based on your industry—e.g., zoning approvals for physical locations or professional licenses for regulated fields.
• Don’t overlook intellectual property: Trademark your business name and logo to prevent future disputes.

Plan for Ongoing Compliance

• Set up accounting systems compliant with GAAP standards.
• Stay ahead of annual filings, franchise taxes, and renewals. With remote work trends, multi-state operations may trigger nexus rules for sales tax.

Forming a business correctly can save you from costly pitfalls like personal liability in lawsuits. If you’re ready to launch or restructure, our team at Prestige Law Group, PLLC can guide you through every step. Contact us online or at (972) 712-1515 or (888) 517-4575 for a consultation.

Darryl V. Pratt JD, CPA