Start-up Legal structure

An important consideration when planning your business is to understand the best legal structure. Why? Because it will effect operating efficiency, transferability, control, the way you report income, the taxes you pay (tax code) and your personal liability.

There are four basic structure types available:

• Sole Proprietorship

• Partnership — General and Limited

• Corporation — S Corporation, C Corporation

• Limited Liability Company (LLC)

The choices can be complicated—and errors can be costly. Business legal structures are regulated by state governments, but your county or municipality also may have license requirements. What’s more, current tax laws make it difficult to change your legal structure after you begin operating. Making the right decision before you open for business is very important. Talk to your trusted advisor to learn more about selecting the best structure for your business.