Choosing the proper legal structure can minimize a cannabis firm’s tax liability and protect assets

(This is an abridged version of a story that appears in the November-December issue of Marijuana Business Magazine.)

Of the myriad decisions entrepreneurs make as they grow their marijuana companies, few are more critical to a business’ financial future than the legal structure chosen at the get-go.

From taxes to raising money to a founder’s personal liabilities, the structure of a company can make or break its chances for success.

“There are so many circumstances where people with access to financial resources will jump in headfirst with their business plan,” said Benton Bodamer, a Columbus, Ohio-based attorney with the law firm Dickinson Wright.

“And while that is a very entrepreneurial thing to do, it’s a mindset that is often accompanied by a failure to bring the financial and legal opinions into the room as decisions are made.

“This is a process that comes with a labyrinth of complex issues.”

Click here to learn how to navigate those issues, including choosing from corporate structures that include:

• Sole proprietorship
• Partnership
• Limited liability corporation
• C Corporation
• S Corporation