- August 6, 2006
- Posted by: Rosemarie Harvey
- Category: Uncategorized
Anyone interested in this blog has an entrepreneurial spirit. You want freedom, personal satisfaction, and profit that are the benefits of entrepreneurship. But before you get to those points of success, here’s something you must consider: How you form your business.
As an entrepreneur, you can organize your business in any of the following legal forms:
- Sole Proprietorship
- Partnership
- General Partnership
- Limited Partnership
- C Corporation
- S Corporation
- Limited Liability Company (LLC)
There are advantages and disadvantages within these different forms of legal organization. You must determine how you want to work and what type is best suited to your personality: you may want to work alone, or you may think that two heads are better than one. In addition, your product or service offering may also help you determine how to best organize your business for profit.
Finally, here are some other criteria by Longenecker et al (2006) that you should consider when choosing an organizational form:
- Initial organizational requirements and costs
- Liability of owners
- Continuity of business
- Transferability of ownership
- Management control
- Attractiveness for raising capital
- Income taxes
Deciding on the best legal form of organization can definitely be a challenge. However, if you take the time to plan and investigate all the options, you will be able to make a sound decision and limit your regrets further down your business journey.