Before opening your doors for your customers, starting your business requires you as a new entrepreneur to make numerous decisions. One of the most important decisions is selecting the right legal structure for your small business. The manner in which you choose to organise will impact your taxes, personal liability exposure, and fundraising options.
The most ideal arrangement for people who like to work alone is sole proprietorship. This structure is a popular choice because it is the easiest to arrange and does not require any filings with the state. However, one of the biggest disadvantages of the sole proprietorship is that entity does not exist apart from the owner.
For those who prefer to do business with a buddy or buddies, a partnership might be a good arrangement. Each partner contributes capital, labour, or expertise in order to turn a profit. The partners share in the profits. But like a sole proprietorship, they are also personally liable for debts and damages.
A company is an entity that is separate from the owners. As a result, the owners are not liable for debts or judgments against the venture. Unlike a limited partnership, all members are free to participate in the management and enjoy protection from personal liability.
So what is the best legal structure for your business? Read this to find out: http://www.dynamicbusiness.com.au/start-up-entrepreneur/which-legal-structure-best-suits-my-business.html