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 break down some of the key points for consideration of the right entity type for a cannabis business. In my last two posts in this series, I looked at corporations and LLCs. In this third and final post in this series, I’ll look at some of the alternative business types we’ve seen or heard about.
A note on limited liability
For those of you who didn’t read my other two posts in this series, I want to define the concept of limited liability. Limited liability is one of the fundamental features of certain business types. If a person owns a company with limited liability protections, the person is generally not personally responsible for the debts, liabilities, etc. of the company. Except in a few limited scenarios, if the company is sued and loses,