Choosing a business structure for your company is one of the most crucial first steps to starting a business. Your business entity type has legal, financial, and administrative implications, so it’s important you get started with the best entity for your situation.
How Can Your Business Structure Affect You?
Your choice of business structure will have an impact on these and other aspects of running your company:
Who qualifies to own your company
Whether you can—and what you must do to–transfer ownership of your company
Taxes your company is subject to
Your ability to get credit and funding
Your personal liability
The number of ongoing compliance requirements you need to satisfy
What Should You Consider When Choosing Your Business Structure?
Some of the factors that will influence which business entity type you select include:
Where you plan to conduct your business
Wanting to have limited personal liability for your business activities
Whether you will have a partner or an investor
Your expected earnings and deductions
Desire to minimize your self-employment tax obligation
Your business goals
Your tolerance for compliance formalities
Registration and administrative costs to set up and maintain a business structure
Before selecting, a business structure, you should talk with your accountant and attorney to determine which will best serve your needs.
Then you would utilize the attorney, accountant, or registering agent to register your business.
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