And Why Choosing the Right Structure is Crucial
When starting a business, you should know which structure you’ll use, whether it’s a Sole Proprietorship, General Partnership, LLC, S-Corporation, or C-Corporation.
This video explains the differences, advantages and disadvantages, and general information about each structure to help you decide what type of structure to use. Also, it can give you an idea of where to take your business in the long run, once your business grows.
But why is it so important to pick the right structure for your business? Read on to know the answer!
Taking Tax Advantages
Different business structures offer their own advantages and disadvantages on a tax standpoint. For example, an S-Corporation can avoid the double taxation issue that can occur with a C-Corporation. By knowing the rules, you’ll play the game better and you’ll be able to save money from taxes.
Dodging Liabilities
If you’re a sole proprietor, you are liable for any business tax, loss, or debt—and this can extend from your business’ assets to your personal assets in the event that the business can no longer pay or take responsibility. An LLC, however, can help avoid this problem. That’s one of the biggest factors you should consider to avoid hitting rock-bottom.
Source of Capital
Some business structures allow you to gather more capital than what you can produce personally, and some don’t allow it. And even for those who do, there are differences as to the qualifications of shareholders or investors. Considering your source of capital can help decide what business structure you’ll use.
These are only few reasons why it’s important to know the type of business you’re going to establish, and how you can do it. It’s wise to ask the experts and get help setting up your business from the ground. Let us give you a helping hand towards creating a business of your own, and achieving success. Contact Us now to get started!
Photo courtesy of renjith krishnan at freedigitalphotos.net
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