LLC, PBC, or NFP?
Originally published on January 23, 2020
Many startups struggle deciding what type of business entity will be right for them. Here, we will identify the differences of each structure, the Limited Liability Company, Public Benefit Corporation, or 501(c)(3) Nonprofit Organization.
All three structures offer Limited Liability, meaning the investors’ and owners’ private assets are not at risk if the company fails. No Owners’ private funds could be seized in order to pay a debt or legal obligation attributed to the Company or Foundation, unless they pierce the corporate veil by commingling funds, misleading creditors or perpetrating fraud.
Additional Information:
https://www.upcounsel.com/purpose-of-llc
https://www.irs.gov/charities-non-profits/private-foundations
https://www.legalnature.com/guides/an-overview-of-501c3-provisions-and-purposes