Starting a new business of the time often fraught with high levels of excitement and anxiety. You have some major decisions early on that will continue to impact your company for many years to come. Everything from the name that you choose for your brand to the scope of products and services that you offer can easily change in those early days.
One consideration that people sometimes put off until their company starts to grow is determining the kind of business structure that will most benefit them. Learning a little bit about some of the more common forms of ownership can help you make an informed decision about how to structure your company.
Partnerships and sole ownership are more straightforward options
The simplest forms of business ownership involve basic partnerships or one person who owns a business as its sole proprietor. However, there are many limitations to this kind of business ownership, including the potential liability and risk that partners for sole owners can incur if the business fails or if someone brings a lawsuit against the company.
Various corporate forms can offer additional protections
The bigger your company becomes and the greater the potential for liability issues in the future it has, the more important it may be to look at incorporating your business. From forming an LLC to more complex and structured corporate entities, there are multiple options available for those seeking the protection of incorporation.
Really looking at your business’s needs, its projected growth and the potential risks you incur by running it can help you make a better decision about what structure to use for your company.