Choosing a structure for your business is easier said than done. Although you may have an idea of what you want to accomplish, you don’t want to make this decision without learning more about all your options.
Here are five details that many people overlook when choosing a business structure:
— Cost. How much will it cost to setup the business? For example, setting up a corporation typically costs more than an LLC or partnership.
— Termination. This may be difficult to think about in the early days of your company, but you need to consider the fact that it could happen at some point down the road. Before you choose a business structure, learn more about your termination options.
— Operation. The business form you choose will help determine the manner in which it is operated.
— Sale. Do you have visions of your company being sold in the future? If so, consider the process you will follow with each type of business structure. Any type can be sold, but some are more challenging than others in regards to paper work and legal details.
— Taxes. It goes without saying that you need to have a firm grasp on your tax situation from day one. Make sure you understand the tax impact of each business structure.
When you focus on these important details when choosing a business structure, you’ll find it much easier to make a confident selection.
Even if you have to bring in outside help, such as an accountant and attorney, it’s best to do whatever it takes to make the right choice. This will save you time, money, and stress in the long run.
Source: FindLaw, “Picking a Business Form: Ten Things to Consider,” accessed Dec. 08, 2016