When selecting a business form, there are many considerations to consider. Selecting the best business form for their venture is one of the most important decisions a business owner or entrepreneur will make so they should have all the information before making the selection and be aware that business law resources can help.
In general, it is important to consider start-up costs, ongoing costs and the business owner’s future goals for the business and plans for its growth. Cost is one of the most significant initial considerations a business owner will want to evaluate, as the cost to run a sole proprietorship is less than a corporation but there may be other advantages to selecting a corporate structure such as those related to personal liability.
Another significant consideration during the business formation process is taxation. This is important to take into account because, although the corporate structure provides personal liability protection advantages, it is usually considered double taxed because the corporation pays taxes and the shareholders also pay taxes. Additional considerations relate to control of the business; ending the business; ease; operation; public information; risk; and expansion, among others.
Selecting the best business form depends on what the long-term plans for the business are, its daily needs and, sometimes, the resources of the business owner or entrepreneur during the start-up phase. Selecting a business form that protects the interests of the business, while providing enough flexibility, can help better position the business for success so the business owner can achieve their dreams and goals.