Building a business can be incredibly exciting—until you hit the legal part.
When you start a business, you have to make the monumental decision of selecting a business structure. This is where you decide the type of legal structure you want for your company, which also determines the tax you pay and how you pay it.
It’ll affect the amount of paperwork your business needs to do, the extent of your liability, and your ability to raise money.
The good news is you don’t need an MBA to understand this. Things are very straightforward when explained correctly. Read on as I decode common business structure basics, along with a few useful tools and tips to set you up for success.
What is a Business Structure?
A business of structure indicates an organization‘s structure as it is recognized in a given jurisdiction.
Choosing a business structure creates a legal recognition for your trade, where it becomes a key determinant of the activities your business can undertake, including raising capital, paying taxes, and the responsibility for the business’s obligations.
Your business structure trickles down to several factors that are part and parcel of running a business. In addition to enlightening the legal documentation you need, it also clarifies the amount of taxes your organization owes to tax agencies. More importantly, it decides the extent of your liabilities on behalf of the business.
Precisely w… Read More