Forming a Real Estate Investing Business

This step, choosing the business entity type, is one of the most important aspects of starting your business. Your business entity type is not just the letters after the name (LLC, Inc, PLC, etc.). It is what determines how your business will be taxed, how it will be operated, the amount of protection it will offer you, and so on. So, be sure to get qualified advice from a professional who knows about real estate investing and the tax involved before you go and register your business.

The types of business entities you have to choose from are:

• Sole Proprietorship
• Limited Liability Company
• Corporation
• Partnership

There are both drastic and negligible differences between these entity types. You have probably seen many real estate investing companies that have an "LLC" after their name. An LLC is a very viable entity type to choose for your real estate investing business; however, every situation is different and it depends on your goals for your business. In general, many experts advise clients that an LLC is an excellent business entity type if the business will own real estate. So, if your business will own real estate consider an LLC. Or, many real estate investing companies form their main parent company in a Corporation. That corporation owns several LLC's, which actually own the real estate.

As you can see, there are many ways to structure your business. It really all depends on your goals and how you plan on operating your business. To help you decide which business entity type is best for you, use the tools we have rounded up for you below.

• Business Entity Comparison Table.pdf - from Bizfilings.com
• Business Entity Formation Assistant - from Bizfilings.com

Use the information and tools we have here to act as a guide for you to steer your decision toward a business entity. If you choose to register your business yourself, please consult with a knowledgeable professional before you do so. However, if you would like a professional to do it right for you the first time, take a look at the reputable online companies that we have reviewed and approved. These companies have shown a solid track record and do excellent work.

• Bizfilings.com - Excellent online business formation company. They are a top choice of ours.