No. of Recommendations: 1
First, if you bring in investors, you simply can't be a sole proprieter. You can of course START right now as a sole proprieter just to see if the whole thing works but you'll be personally responsible for anything that goes wrong or right.
A partnership is fine, however most investors won't want to touch it because they could be held liable if things go badly for MORE than their investment.
Limited partnerships, great for investors but there is the general partner who is still on the hook for everything which isn't to far off from being a proprieter. A general partner can of course be a corporation. The advantages of partnerships are that the are VERY flexible, however to take advantage of them well you have to be savy.
Example: a restraunt creator I know started a place here in houston as a partnership. the investors recieved 90% of the profits until they got their money back, at which point they recieved half the profits for the next two years, and after that 30% forever.

I steer most people who ask towards a corporation or LLC.

A corporation offers some nice legal and tax benifits at the cost of having to do more paperwork. If you run the corporation properly, you personally won't be responsible for any legal liabilities the company runs up. Plus a corporation can be sold far more easily and for more money.

The only real question is, what type of corporation?

Do you want to pay taxes on the companies profits every year even if you don't take money out? This would be fine for a s corp
Or pay taxes only if or when taking money out, but have the corporation pay taxes every year?
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