Getting Organized: Choosing the Right Business Structure

To be. … And how to be. Those are the first decisions you’ll make when you go into business for yourself.

The first is monumental: You decide to stop dreaming and start doing. You know your business, you understand your market and its potential, and you can’t wait to get started. There’s a kind of stomach-churning excitement.

The second decision is fundamental:  You have to choose how your business will be legally structured and organized.

It’s surprising how many people approach this entirely as an afterthought.

When we ask our clients at the Small business Assistance Office what kind of business structure they’re considering, they often respond with a question of their own: “Hmmm, what are the choices?”

But the decision is too important to make on the fly. You’ve really got to take the time to understand and weigh the options.

There are many ways to organize your business. Sole proprietorship. Partnership. Limited partnership. Corporation. Nonprofits and other special types of business organizations. Each has its own set of advantages and disadvantages.

While several factors come into play, the two major issues to consider when structuring your business are:

• How much the owner (or owners) are insulated from personal financial responsibility for the debts of the business.
• The way – and how much – taxes are paid on business profits.............

To read more from this blog post,

visit the Minnesota Business 101 blog at http://mnbusiness101.wordpress.com