Choosing the right structure for a new business is one of the most critical decisions made during the formation period. Entrepreneurs will have to make many choices in those initial stages that will affect how the business will operate, how taxes will be computed and more. There are many factors that go into making the right choice, and many business owners find it helpful to seek small business counsel as they take these steps.
The choice of entity can allow the owner of the business to protect his or her own property and separate personal liability from any business liability. The choice of entity also affects how the company will pay taxes, whether the business can sell shares and how the business is managed. While it is possible to change the structure in the future, a Tennessee business owner will want to try and make the smart choice from the very beginning.
When considering options, an owner will want to look at his or her goals for the company, as well as whether he or she is willing to be personally liable for business debts. The existence of partners, plans for capitalization and how the owner wants to manage the company should also be taken into consideration. There are also specific tax ramifications for each choice.
Seeking small business counsel can help a Tennessee business owner avoid issues and make smart choices during the business formation process. The choices made during the earliest stages of a company are some of the most important, and they will set the course for future operations. An assessment of business goals and needs can help an entrepreneur choose the right structure for his or her company.