One of the most important decisions a new cannabis business can make is the form of entity it will use. In fact, one of the first questions businesses ask is whether the right entity for a cannabis business is a limited liability company (LLC), corporation, or something else. Like basically every other legal analysis, the answer depends on a lot of business-specific factors.
In this series, I will break down some of the key points for consideration of the right entity type for a cannabis business. In my last post in this series, I looked at corporations. Today, I cover LLCs.
A note on limited liability
In case you didn’t read my last post in the series, I want to define the concept of limited liability. Limited liability is one of the fundamental features of an LLC. If a person owns an LLC, the person is generally not personally responsible for the debts, liabilities, etc. of the LLC. Except in a few limited scenarios, if the LLC is sued and loses, the owner won’t lose anything – except, at most, their investment in the LLC.
LLCs are usually the right entity for simplicity
In my post on corporations. I mentioned
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