RISKY BUSINESS: Construction Risks vs. Business Entity Selection

Construction is risky. However, risks can be mitigated depending on the type of corporate entity you select for your business. (i.e. Corporation, Partnership, LLC) Corporations and LLC's limit an owners liability to the capital invested in their business. Meaning, owners will not be held personally liable for the liabilities of their business. This is also known as "piercing the corporate veil". On the otherhand, partners of a General Partnership are jointly and severally liable for the liabilities of the Partnership itself. This is not a good thing in the world of construction. In addition to risk, there are several "tax" issues you may want to consider when selecting a type of business entity. Please consult with an attorney or accountant for more advice on possible tax consequences.