Choosing the Right Business Structure

The business structure you choose should match the needs of your particular business. Keep the following in mind:

• The complexity of your business – do you have unique or complex requirements? For example do you have 100s of shareholders, passive investors, are you subject to federal licensing, do you have international business operations?
• The flexibility you desire – do you operate best on your own and want to make decisions for the business without following many formal record keeping requirements?
• The expense of maintaining the entity – some structures are simply more expensive than others.  Are you prepared to undertake the expense in the years to come for preparing separate tax returns?

Remember also, that as the needs and circumstances of your business change, you can also change your legal form.  Even after you incorporate, you are not locked into it forever. 

As a business grows and evolves it will go through phases, and different entity structures may be appropriate for various stages in a company’s life cycle.