If you are in the process of starting a business, you’re sure to have a variety of tasks staring you in the face. One of the most important is forming a legal business.
Before you can do so, however, you need to choose the right business structure. While this sounds easy enough, with a variety of options, it can actually be a difficult decision.
Most business owners compare the pros and cons of a corporation and LLC. These are the two primary options, so it’s a good idea to start here.
For example, an LLC is often selected because of its flexibility and simplicity. With this, you can get up and running without as much paperwork and high level business decisions. Furthermore, an LLC provides additional liability protection.
Conversely, there are times when a corporation makes more sense. For example, this often works out best if you’re seeking funding and plan on having a large number of outside investors.
When the time comes to choose a business structure, answer these questions:
— How many owners are there?
— What are the goals associated with the business in terms of growth?
— What are the pros and cons of each type of structure?
In an overall sense, you can’t go wrong with any type of business structure. That being said, it goes without saying that one type is probably better for your organization than the rest.
With the right approach, you can form the type of business that best suits you and the goals you hope to reach in the future.
Source: FindLaw, “Corporation versus LLC,” accessed Nov. 17, 2016