Do you know the types of business structures? The type of legal structure you choose for your company is the most important of all the decisions you make when starting a business. Knowing the right type of business structure is also important when computing your taxes.
Aside from having a big influence to your tax payments, it will also affect the amount of paperwork your business has to do, your ability to earn profit and the personal liability you face.
The following are the type of business structures:
Sole proprietorship – for those who want to work alone, sole proprietorship structure can be the best for you. It is the simplest structure which only involves just one individual who owns, at the same time operates the entire business.
Partnership – partnership is a type of business where there are two or more people who share ownership, management decisions, gains and losses.
Corporation – is a legal entity that is separated from those who founded it as it handles the responsibility of the organisation. Like a person, the corporation can be taxed and can be held legally liable for its actions.
To learn more about business legal structures, their advantages and disadvantages, you should read this blog post by Entrepreneur.com: http://www.entrepreneur.com/article/38822