Building A Business: Which Structure To Choose
A common question when starting a business is, “What business structure is best for me?”First thing: talk to your business accountant about which structure to choose (you want an expert opinion, after all).Meantime, let us help. Here’s a little more on business entities:
- Sole Proprietor: Sole proprietor is a common business entity for moms who run a business at home. It has the least legal formalities; however, places all liability on you as the business owner. There is no separation between business and personal assets in a sole proprietor entity. If your business gets sued, your personal assets can be tapped into.
- LLC: A Limited Liability Company recognizes your business as a separate entity from your personal assets. If you get sued or have legal action taken against you, your personal assets are protected.
- Partnerships: General and Limited Partnerships are most beneficial if you have one or more owners of the business. It provides legal protection for each owner.
- Corporations: Consider a corporation if you have shareholders in your business. A corporation is a larger entity, often for business that has employees, and offers employee benefits.
Remember, choosing the right business structure is uber-important. Legal protection, taxes, liabilities and more are determined by which structure you choose. Click here to see an awesome infographic that explains in great detail how to choose a business structure.