Before you open a business, you must select the legal structure that will best suit your needs and those of your particular business. There are three principal types of business structures: the proprietorship, the partnership and the corporation. Each has its advantages and disadvantages, which will be reviewed.
Consider the following when choosing a legal structure for a business:
- What is the risk and what is the amount of the investors' liability for debts and taxes?
- How will the continuity of the business be handled if something happens to one of the principals?
- What is the influence of applicable laws?
- Can you attract capital?
- What are the costs of starting and running the business under the different structures?
- Can you afford the extra recordkeeping and reporting required by some structures?
- What legal structure best serves the purpose and goals of the business?
- What legal structure ensures the maximum adaptability of administration?
Seek professional advice to select the legal structure for your business. Contact our partner, the Small Business Development Center, at the Workforce Connection Business Services Center via email at
firstname.lastname@example.org or by phone at (877) 954-4473.