There are approximately 100 billion decisions you have to make when starting a business.
Okay, maybe that’s a small exaggeration—but you know how many critical choices demand your attention as a business owner.
One of the earliest and most important decisions you’ll make is what type of business you want to create. I’m not talking about favoring online versus physical stores or selling products versus services; this is about the type of legal form your business should take.
This determines how you’re taxed, your personal liability, how you raise money, and what happens to your business should something happen to you, to list a few considerations.
That’s why we wanted to do a deep dive on business formations today. We want to take a look at how businesses are structured in the United States and what exactly that might mean for you as you get your business off the ground.
Let’s jump in.
Disclaimer: This study is based on U.S. business formations. Apologies to our international readers out there! But we think you’ll find the information here helpful especially if you conduct business with a U.S.-based client, partner, or vendor.
The 5 most common types of business structures in the US
There are many different types of business structures out there. However, we want to take a look at the five most common types, and what that might mean for you.
They are:
Sole Proprietorships
Limited Liability Companie… Read More