The Different Business Structures for Your Company
Entering into a business is not just all about a great idea. You need to be a person who can go through all the issues you could possibly encounter in the process of creating your own organization. Bravery, willpower and a healthy dose of resilience are example of the qualities that a person starting a business should have. There sure are a lot of factors to consider in starting your business but the most crucial part is the trading method.
You need to consider a lot of factors in choosing the right structure for your business. One small wrong decision can make all things go wrong in the blink of an eye. So, it is significantly important that you consider the advantages of operating as a sole proprietor, an LLC or an LLP or even as a corporation in the long run. Someone who wants to manage the business on their own will be a sole proprietor.
Becoming a sole trader is regarded as the most basic way of handling business. A sole trader gets to keep financial records and file accounts and gets to use the profit however you want. However, if you need the assistance of other people, say an employee, then you might want to consider a different legal status for your business.
A common type of flexible professional business structure is LLP or also known as limited liability partnerships. People who usually choose the LLP are lawyers, accountants and other professionals. In LLP, each partner gets a slice of profits and has a share in the business. Partners are also protected from liability as long as they do not become a managing partner.
The one that gets to enjoy lots of flexibility is the LLC or limited liability companies. The company is protected from business debt and other liabilities. An LLC is not a corporation but a type of legal company that offers restricted responsibility to its owners. To help you know more about limited liability companies, look for an LLC agent.
And of course, just like everything in this world, these structures have its own pros and cons. Managing as a sole trader is only suitable if you are operating alone. You can get immediate access to any profits you make. However, you are personally responsible for all the business’ debt.
A limited partnership, although offers a lot of flexibility and is easy to set up, can still make disagreements arise. Only one person is accountable for the obligations but one incorrect move of a partner is the responsibility of all partners.
A limited liability company does not have the same credibility as a corporation has and it comes with a lot of tasks.
As you can see, each business entity has its own pros and cons so it is better to not decide immediately.
More ideas: you can look here