Picking Your Business Structure
Structuring your company will have a significant impact on all sorts of money matters including your taxes, financing, compensation, and insurance. And don’t forget your exposure to lawsuits. Therefore, a business owner’s first consideration is usually: What type of company do I want to create?
There are generally four questions you'll need to answer:
- What kind of liability protection do I need?
- How do I want to pay taxes?
- What are my financing needs and options?
- And, how much administrative complexity can I deal with?
Of course there are other issues too. But when you’ve addressed these four, you should be fairly close to an answer. Here’s a guide to help you understand the pluses and minuses of each type of structure.
Keep in mind that regulations for starting a company differ from state to state. Click here for a list of links to each state’s agency for registering new businesses.