Updated: Jan 11, 2020
For businesses just starting out it is essential for them to have a strong understanding of business entity and structure. Here we will tell you what a business structure is, why its important, and give you some pro tips to use when structuring your business.
What is a business structure?
Business structure is the way you decide to legally file and organize your business. You are given the option to run your business as a Sole Proprietor, LLC, LLP, or a Corporation. This is a big decision to make and requires consultation with business experts as well as a lot of research on your part. In this business article, we will discuss why structuring is important, what structuring effects, talk about all the business entities and provide professional tips to implement when its time to structure your business.
Why is structuring your business important?
Structuring your business will impact your year to year operations. It affects how you file your taxes, your ability to crowdfund, your liability and asset protection, as well as dictates how much annual paperwork is required to stay in business.
Sole Proprietorship - Sole Proprietorship is by far the most popular business structure in
the USA with over 23 million businesses structured this way. By definition, a sole proprietorship is a type of enterprise that is owned and run by one person and in which there is no legal distinction between the owner and the business entity
Advantages of a sole proprietorship: Fast to start, easy + inexpensive to maintain, easier tax reporting, privacy within your business, minimal reporting requirements, more control over your business, in most c