To succeed in the growing functional beverage industry, understanding key legal issues is crucial. As new functional beverage brands continue to emerge, business owners need to consider a variety of legal issues, including (1) proper product categorization, (2) appropriate advertising and marketing claims, (3) engaging with influencers, (4) working with contract manufacturers, (5) ensuring adequate IP protections, and (6) selecting the appropriate corporate entity structure.
Whether at 7-11 or at your local grocery chain, functional beverages line the aisles, touting their nutritional and health benefits. The functional beverage industry is becoming big business, but as this industry bubbles up, emerging brands need to think about the best corporate structure to hold their product.
Below, we have provided some pros and cons of three (3) standard corporate structures often considered by early-stage businesses: limited liability companies, S corporations, and C corporations.