As you’re working to get your business up and running, you have a lot of decisions to make. Amongst them is choosing the business structure that’s right for you. Although that may seem like a minor decision to make, the fact of the matter is that the business structure that you select can have a profound impact on the way your business operates and the amount of risk that you take on.
Sole proprietorship
For example, a sole proprietorship is going to be easy to set up, requiring very little formal action. Also, you’ll retain full control over your business. But there’s a lot of risk with a sole proprietorship, as your personal finances are entangled with those of the business. Therefore, any lawsuits filed against your business may impact you on a personal financial level.
Partnership
Partnerships can give you a greater ability to secure financing to get your business off the ground while still retaining a significant amount of control over business operations. Although some partnerships still leave you open to liability, there are risk mitigation strategies that you can utilize when forming your business under this structure type.
Corporation
A corporation is going to give you the least amount of control over your business, but it also protects your personal finances and probably gives you the greatest amount of flexibility when it comes to obtaining capital.
Consider all implications of your business structure
There are a lot of components to a business structure that can have profound ramifications for you and your business in both the short term and the long term. That’s why before settling on a business type you may want to discuss it with your business law attorney. That way you’re making the fully informed decisions that will position you for success.
