Choosing how you can setup your business is simpler than you may think. Considering that you've only four primary choices, the chances of narrowing the choice quickly are in your favor. Yet one of the most often asked questions when someone is beginning a business is "Which structure is the best for me?" To get started, you need to solve four key issues:
Ownership: Deciding who ultimately owns or controls your company is really a primary relation to your selection of legal structure. Another factor may be the number of individuals who control the business. Some types of business are restricted to both quantity of owners and also the kind of owner (individual or corporation) it may have.
Liability: You have to choose in which you want the responsibility for that business to reside in. Deciding whether you're comfortable accepting full liability for that actions of the company or whether you need the security (or veil) of the corporation is a vital choice.
Taxes: Each of the business structures is susceptible to many forms of taxation. For example, you may pay a self-employment tax depending on your earnings. Or, you may be taxed on the dividends paid to all owners in the business. In the case of one kind of incorporation, you may even experience double taxation - paying tax because the business and again being an individual stockholder.
Since the tax issues are extremely complex, first talk to a tax attorney or cpa to find out which option best suits your specific circumstances.
Funding: The way in which in that you finance the development of your company can enjoy a substantial role in determining its structure. If you are bootstrapping (self-financing) the organization, any of the structures might meet your needs.
However, if you seek outside financing from private investors or vc's, you need a choice of having stock readily available for distribution. If another business entity intends to own stock in your company, your selection of business structure is severely limited. Now that you understand these four primary regions of concern, you ought to have a better concept of where your specific requirements fit in.
Our website is not responsible for the information contained by this article. Webworldarticles.com is a free articles resource thus practically any visitor can submit an article. However if you notice any copyrighted material, please contact us and we will remove the article(s) in discussion right away.
This article was sent to us by:
Justin Hughues at
07042011
1. Choosing the right online business and starting it
All articles in this directory are property of their respective authors. Additionally, read our Privacy Policy
© 2010 WebWorldarticles.com - All Rights Reserved. Partners: Gunblade Saga