One of the first decisions that you will have to make as a business owner is how the company should be structured. This decision will have long-term implications. In making a choice, you will want to take into account the following:
-
The size and scope of business you hoping to attain
-
The level of control do you wish to have
-
The level of structure you are willing to deal with
-
The business's vulnerability to lawsuits
-
Tax implications of the different ownership structures
-
Expected profit (or loss) of the business
-
Whether or not you need to re-invest earnings into the business
-
Your need for access to cash out of the business for yourself
There are four basic legal forms of ownership for small businesses:
Sole Proprietorship
Partnership
Corporation
Limited Liability Company
To learn more about deciding which is the right legal structure for your business take a look at How to Choose the Legal Form of a Business.
