So, you’ve decided to ditch the employee badge and become your own boss. Good for you. But now that you’re taking that big, bold, leap, have you weighed up the business structure options?
When you’re a business owner, you’re always trying to see around the next corner. Choosing the right business structure is one of the most important decisions you’ll make in the early days of your company. So, take the time to learn what the business structure options are, which is best for your business, and why.
As always, At BAAP C.P.A. we’re happy to explain it all…
A business legal structure is also known as a business entity, and it’s a government classification that regulates some aspects of a business. On a state level, it determines the liability, and at a federal level, it determines the tax burden.
The most common types of business structures are sole proprietorships, partnerships, limited liability companies (LLCs), corporations, and cooperatives.
Making sure that you choose the right legal business structure is an important step because there are certain consequences to consider: It will determine your tax rate, paperwork and management requirements, fundraising abilities, and more.
There are other consequences such as hierarchy, registration, and fundraising – all depending on which business structure you chose.
It’s not always obvious which business structure to choose when you start a business, so it’s a good idea to meet with an expert to weigh up the options, give it careful analysis, and look at the long-term consequences.
Bear in mind also that if you feel that your initial choice of business structure was a mistake, you can change your business structure in the future.
The factors you and your advisor should weigh up include:
Make sure that your business is benefiting from its structure and maximizing its profits.
Talk to the seasoned tax experts. We want your business to flourish, and avoid the tripwires. We work with clients in the Tampa Bay area to assess the ideal business structure needed to maximize cash flow. It’s all about weighing up the operational and tax considerations and minimizing the risk exposure.
At BAAP C.P.A. we are your business advisors. This means that we’re the ones to talk to about all things business strategy, tax management, accountancy, and financial advice. The testimonials, written by the business owners that we have worked with, show that with our guidance, a business can go from surviving to thriving.