2.1: Choosing a Business Structure
There is no “one size fits all” when it comes to selecting the right type of business structure. In fact, some start-ups begin as one entity and evolve into another as their company’s needs change.
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, so consult with an accountant and attorney to help you select the form of ownership that is right for you. In making a choice, you will want to take into account the following:
♦ Your vision regarding the size and nature of your business.
♦ The level of control 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.