The world is your oyster when you’re starting your own business. Many people prefer to work for themselves rather than working for someone else. This can be a great way to achieve success and financial freedom in your life. When you have decided to take the plunge and start your own business, it is important that you set up the right business structure to begin with. Propel Your Accounting is here to talk about the different options that you have to choose from when it comes to choosing a structure for your business.

Different Types of Business Structures

There are several things to consider when you’re choosing the right business structure for your business. Things like your goals, tolerance for risk of personal assets, taxes, and management are all going to play a role in how you decide to structure your business. We would like to point out the different options you have as far as business structures go.
– Sole Proprietorship: When you are the sole owner of the business and and will be reporting the profits of your business on your own tax return, you will benefit from a sole proprietorship model. It is a simple business structure and a good starting point for small business owners.
– Partnership: This is another simple business structure for new business owners. If you have a partner in business owner who will be splitting the profits with you, this will be the route you might decide works best. There are a few different partnership types to choose from though, general partnerships, limited partnerships, limited liability partnerships, and limited liability limited partnerships are all good options. To choose the right one for your business, it is recommended to consult with a business advisor.
– Limited Liability Company (LLC): Another common business structure is an LLC. This is a hybrid business structure. It allows a limited personal liability for the owner but still allows the profits to be taxes on a corporate level.
– S Corporation: If you have chosen an S corporation structure, you have one class of stock and no more than 100 stockholders. All the profits from the business will be reported on the tax returns of the stockholders in the corporation. The share holders have limited liability.
– C Corporation: For this business structure, the profit will be taxed on a corporate level and then again on an individual basis between shareholders. The shareholders will have limited liability on the corporation’s debts. There can be multiple classes of stock and you won’t have any limit on the number shareholders.

Bookkeeping, Accounting, Business Consulting & HR / Admin Services in the United States of America

If you’re a new business owner and wondering what business structure you’re interested in, you might have questions to help you make the right choice. This is when you can turn to Propel Your Accounting to help you make the best decision for your business to help you succeed. Call us today!