14 – Determining Your Business Structure
No matter what your business does, the government has laws about it. Some of these laws keep businesses from harming others, while some protect businesses from being harmed. All businesses and business owners have a responsibility to the government – federal, state, and local – to be aware of and conform to laws regarding the various aspects of their operations. Your business is no exception.
While many laws may apply to your business, the extent to which specific laws apply depends on the type of business structure you choose. A business structure is an organizational framework that determines which laws apply to your business. Business structures come with specific legal protections, required filings, limitations on activities, and taxes owed.
Although we’ll look at each structure in depth, you’ll find a comparison chart for reference.
The right business structure for your business is unique to you, your situation, and your tolerance for personal risk. Think through the following business structure descriptions to find the one for you. The descriptions here are intentionally simplified and are not meant to replace legal counsel.
- Sole Proprietorship
- Partnerships
- Limited Liability Company
- Cooperative
- Corporations
- Socially Minded Entities
- Tax Exempt Organizations (Non-profit)
QUESTIONS YOU MAY WANT TO ASK:
- Why does legal stuff matter?
- What can go wrong if I don’t set things up right?
- Can I change my business structures if my needs change?
- What are the most common mistakes you see people make in starting a business? How do I avoid them?
- When should legal counsel be sought?
There is one assignment in this lesson. Complete the topics and come back to the lesson to access the assignment. (You can either type directly on the fillable PDF and download it to your device or you can print the assignment, complete it by hand, scan or take a photo of it and then upload it below.)
Click here for the PDF of Assignment 14.1 – Determining Your Business Structure