Hi everyone. Remember that when setting up your company, you face a number of crucial decisions. In this article we’ll address how to choose the various forms of business organization (also known as company structures) and help you determine which one is right for you. We’ll also look at how to create and implement a stock option program. Bear in mind that the majority of these issues will be handled by your attorney and controller, which are two functions you will outsource. You must, however, choose the structure best for you and your company, at least initially. As your business evolves, so will your company’s needs. Your goal in the beginning is to create a basic understanding of the structures available to you.
Over the next week, I will outline the proprietorship, partnership, and corporate forms of business, and describe the benefits, risks, & basic tax aspects of various organizational forms, please keep in mind that you will need to discuss this information with your attorney and accountant. I don’t profess to be an expert in knowing the exact structure that will be best for you. You’ll want legal and accounting advice based on your financial and tax profile to make this decision. Having said that, these are the basics to keep in mind as you go forward. There are many ways to organize your business. You can use Proprietorships, Partnerships—both General and Limited, Corporations—both C corporations and S (or Subchapter S) corporations, and Limited Liability Companies (or LLCs) or “Hybrids” of these company types. Let’s look at the definition as well as pros and cons of each. Tune in tomorrow and all week long to get a great (albeit very basic education) in business structures to consider as you grow into your success.