Goldilocks was a girl who decided to venture into new territory. Along the way, she found herself tired and hungry. Luckily, she had options. After trying them all out, she discovered not all the options were the right fit. If there is anything we learned from good old Goldilocks is that to feel comfortable you have to find an area that’s “just right” for you. This past week, I have done research on types of business entities. There are several different business types for you to choose from. They all have their benefits and drawbacks. Originally, I thought I wanted a sole proprietorship. A sole proprietorship is the easiest business entity to get up and running. You are only taxed once because there is no separation between you and your business. However, you are liable. Your personal assets are at risk if you are sued. I wasn’t sure if this was a risk I was willing to take. My other options were a partnership, limited liability company or a corporation. I instantly crossed out a partnership because I am the sole creator of my business. A limited liability company offered a lot of benefits with few drawbacks. It offered protection from liability, as well as, only being taxed once. However, I decided to go with a corporation because my hope is to continue to grow my business and most investors want to deal with corporations. Corporations are more work to start. They must also follow specific regulations. However, it’s worth it for me because I want a large company that expands into other areas down the line (i.e. clothing and accessories). For me, a corporation is “just right”. When you start your own business this is one of the first things you will need to decide. It effects where you need to move forward legally. Below are some links with information on the different types of business entities.
Video: Choosing Your Legal Business Type- http://www.youtube.com/watch?v=i7PulXuCI4w