What Type Of Business Entity Is Right For You? 4 Questions To Ask Yourself

As an aspiring entrepreneur, hundreds of decisions lie ahead of you. Where should your business be located? What type of loan will you need to secure in order to obtain proper funding? Will you need to hire employees? If so, how/when will you conduct the hiring process? How do you want to setup your office space? The list goes on and on.

One of the questions you will need to answer relatively early on in the process is how you want to structure your business. There are multiple business formats to choose from - limited liability company, sole proprietorship, partnership, corporation, and more.

Our Lake of the Ozarks business attorney is here to help you determine which business entity may be best for your specific situation. Asking yourself these questions can get you started in the right direction.

Question #1: What Resources Am I Able To Dedicate To Setup And Ongoing Administration Costs?
Depending on the type of business entity you select, you may be faced with rather steep setup costs as well as expensive ongoing administration costs. Corporations, for example, generally require that fairly extensive records be kept of all meetings, agendas, and other issues. Unless you are able to delegate this task to a trusted employee, keeping up with all the required record-keeping may take up a significant chunk of your valuable time.

Question #2: Am I Able To Be Financially Responsible For My Business?
Certain types of business structures (such as a sole proprietorship and a partnership) do not provide any insulation between the corporate finances and the owners' personal finances. In other words, the business owner(s) may be held personally responsible for the company's obligations. If your company will be dealing with expensive equipment or high-dollar contracts, for instance, you may want to pursue a different business format (such as corporation or a limited liability company) that can provide you and your personal assets with more protection.

Question #3: How Do I Want To Handle My Company's (And My Personal) Taxes?
The type of business structure you select will impact the type of taxation your company and your own personal earnings are subjected to. Generally, businesses and owners may be taxed in one of three ways: the business' profits may be taxed, the owners' income may be taxed, or both these profits may be taxed. We recommend that you consult with an accountant to learn more about how each type of business format is taxed and how it may affect you. 

Question #4: What Will Be My Company's Future Needs?
In the early stages, it is easy to become solely focused on the tasks required to get your business up and running. In order to position your business for long-term success, however, it is important that you spend time envisioning where your business is headed. Will you want to bring additional owners into your company as it grows? If someone wants to sell their interest in the company, how do you want that process be handled? Your business structure will impact how matters such as these will be addressed, so it's important to give that some thought in the beginning.

Schedule A Consultation With O'Donnell Law Center For Assistance
If you are in the early planning stages of your business, we hope you'll consider scheduling a consultation with our business attorney in Osage Beach MO. Our experienced attorney can help you address your concerns and point you in the right direction as you get your business up and running. Building an alliance with a local business attorney in the beginning may also prove to be hugely helpful down the road as you face inevitable challenges and future questions. 

Contact O'Donnell Law Center to begin your journey today!

We Carry Your Burden ~ You Carry On With Life.

Disclaimer: No attorney-client relationship is created by the publication of this blog.

The choice of a lawyer is an important decision and should not be based solely on advertising.

Phone: (573) 552-0317

O'Donnell Law Center, LLC
1026 Palisades Blvd. Suite 3
Osage Beach, MO  65065


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