Of the many decisions you make as a small business owner, one of the most important decisions you make is your company’s legal structure. Not only will this decision have an impact on how much you pay in taxes, it will affect the amount of paperwork your business is required to do, the personal liability you face and your ability to raise money.
You must decide whether your business will be a sole proprietorship, partnership, corporation, or limited liability company (LLC).
What’s Right for Your Business?
That depends on the type of business you run, how many owners it has, and its financial situation. No one choice suits every business.
As a business owner you will have to pick the structure that best meets your needs. Some things you’ll want to consider:
- your income tax situation
- the potential risks and liabilities of your business
- the management of your business
- how your business will persist or be sold to another owner
- the formalities and expenses involved in establishing and maintaining the various business structures
Watch this 20 minute video. It will walk you through your options and inform your decision making process. Do your research. It can make a huge difference later on. In business, as in life, one size rarely fits all.