When you are thinking about starting your own business, you have many important decisions to make.
One of the most important is to determine how your business will be structured.
As seen in the article, Top 20 Web Resources for Business Newbies, there are myriad opportunities for guidance in all aspects of business development. This article discusses the various options available and their advantages.
Sole Proprietorship: This is the most common business structure, largely because it is the simplest to form and allows the owner to have complete managerial control. The owner is also liable for all financial obligations.
Under a sole proprietorship, there is no separate business entity. Instead, the business’ assets and liabilities are bundled with personal assets and liabilities.
Partnerships: Partnerships are the simplest way to create a business structure for two or more people. There are two common types:
Limited Liability Companies: An LLC has advantages of both corporations and partnerships. Profits and losses can be passed through to personal income without incurring corporate taxes. However, members of an LLC are considered self-employed and must pay taxes, accordingly, including contributions to Medicare and Social Security.
Corporations: A corporation is a legal entity separate from those who establish it. The corporation can make a profit, be taxed, and be held liable.
The primary advantage of a corporation is that individuals cannot be held liable. Corporations, however, require lots of record-keeping and can be expensive to form.
There are multiple corporate structures to consider, including:
With so many possible business structures available, it is important to have a clear sense as to what works best for your entrepreneurial venture and funding possibilities. At Benetrends, we help companies by creating a C corporation structure that lets owners use their existing 401(k) funds to start a business. With the proper structure, Benetrends helps small business owners gain access to needed funding to fuel their entrepreneurial journey.
To learn how Benetrends can help your entrepreneurial aspirations become a reality, download Innovative Funding Strategies For Entrepreneurs today.
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