When you have decided to enter the business world, you have to choose which path you will go through. However, there are numerous types of business structures, and this process can be confusing either for an entrepreneur or businessman. Before you decide what business structure type to use for you, appraise all of them meticulously.
If you want to own an unincorporated business by yourself, you can choose this type of business structure. Also, a sole proprietorship is not a separate legal entity from the business owner. In this type of business, there are no partners; individuals can own it. A sole proprietorship will be a perfect choice for an entrepreneur and a businessman who want to start with low-risk businesses. A sole proprietorship is also among the most common forms of business structures.
Limited Liability Company
Limited Liability Company (LLC) is a business type that combines the benefits of a sole proprietorship, partnership, and corporation types are accepted by all states in the United States. Each state may have different regulations, but most states do not restrict ownership. The company owner can be an individual, an entrepreneur, an incorporated company, a foreign person, or another LLC. Limited Liability Companies provide flexibility to business owners according to the situation; instead of being treated as a partnership, an LLC may elect to use corporate tax, and in some cases, LLCs may be arranged to get non-profit.
Incorporation means forming a new corporation. If you already have a sole proprietorship or general partnership, and if things pick up, you can turn your business structure into a legally recognized business. Incorporation has many benefits for an entrepreneur and a businessman, from personal asset protection to tax advantages. This business structure may be a good choice for you if you want to secure your business.