When starting a business, it is essential to decide on the right business structure. The most common forms of business are the sole proprietorship, the joint stock company, and the S corporation. A limited liability company (LLC) is also a popular business structure allowed by state law. The five types of business structures are the sole proprietorship, the limited liability company, the corporation, the cooperative, and the franchisee.
Choosing the right structure for your business is a crucial decision that requires careful consideration. It is important to understand the legal and tax implications of each type of business structure before making a decision. Generally, anticipated expenses will include state and federal fees, taxes, commercial equipment leases, office space, bank charges, and any professional services your company hires. For instance, in the case of a sole proprietorship, the partners have all the legal liability of the company, including debts contracted against the company. Probably the best-known international corporate structure is the international LLC or limited liability company.
Through an international LLC, you can limit your liability to the value of the company itself. This type of business structure is ideal for businesses that operate in multiple countries as it allows them to take advantage of different tax laws and regulations in each country. Additionally, an international LLC can provide protection from personal liability for its owners. If you're still not sure which business structure is right for you after doing your research, it is recommended to talk to a business law specialist. They can provide advice on which type of business structure would be most beneficial for your particular situation.
For additional information, see the Choose a Small Business Administration Business Structure web page. How you decide to legally structure and establish the ownership of your business could be one of the first decisions you'll have to make as a business owner.