Is a LLC (limited liability company) the right choice, or is it better to open a corporation? Is it best to simply operate as a sole proprietorship?
On our national call-in radio program, we hear variations of this question a lot. The answer lies in the specifics associated with your business.
To help you determine the best business structure, we’ve put together an overview of several options. For starters, it’s important to take the time to review your personal and business objectives by developing a business plan . What should emerge are answers to questions like,
- Do you want investors as shareholders in your company?
- Do you want to maintain control of the business if you have investors involved?
- Do you anticipate losses in the early stages that can be taken as tax benefits by shareholders?
- Do you want to avoid double taxation?
- Is there a great risk of liability associated with your specific startup business?
Think through these questions carefully since your answer to each will help guide you to the right business structure and steer you away from the wrong one.
To help you determine the best structure for your small business, we’ve put together an overview of several options. And remember, it’s always best to work closely with an attorney and/or accountant to ensure you make the right choice.
Sole Proprietorship
Let’s say you are a graphic designer and plan to offer your services on your own without involving any partners. You might consid...
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