Choosing your business structure is one of the most critical steps in starting your business. A business structure determines many operational decisions in your business, including tax structures, liability protection mechanisms, and the level of complexities in your business. For businesses already in operation, owners need to undertake some assessment procedures to make sure that the business structure in operation remains the ideal structure.
What is a Business Legal Structure?
A business legal structure is a formal classification of business forms that regulates various aspects of your business. Startups may use their attorneys and tax consultants/experts on what applies to your business.
TYPES OF BUSINESS STRUCTURES
There are many business structures; however, the most common ones are sole Proprietorship, partnership, company, and corporation. Furthermore, these business forms differ in the context of ownership and the limited liability protection level. Remember that you can change your business structure as you go along; however, if not well thought out, changing your business structure can cause disorganization, confusion, and chaos that may affect your profit and tax issues. Thus, before you make your decision on the type of business structure to venture into, you need to understand clearly what each type means and the basis of their variation. Below are some details on the common types of business structures that small business owners can think of.