Of all the decisions you make when starting your own small business, one of the most important is the type of business formation structure you will use in Indiana and Kentucky and in Louisville and the surrounding areas. Below you will find some tips for helping you determine the optimal business formation structure for you.
Consider Your Options
The first thing you want to do is consider your options. There are four basic types of business formation structures for you to choose from:
- Limited Liability Company, or LLC
- Partnership
- Sole Proprietorship
- Corporation
Base Your Decision on Flexibility and Tax Planning
You need to base your decision on the flexibility so that you and your business can adapt and adjust as your business grows so that you can protect your personal assets and limit your personal liability, and minimize taxes. You want to consider the unique needs that you will have as the owner, as well as the unique requirements for the business that you are planning to create. Remember, no two businesses are alike, just like no two people are alike. You need to analyze and decide on a structure based on your specific requirements, goals and needs, not based on the needs of a friend who is also a landlord or the person who owns a retail store down the street.
Think about the Future
Consider where you want your business to be a year, even 5 years down the line. Do not get caught up in the excitement of moment and forget to envision and plan ahead for where you want your business to be in the future. Questions like “What will happen to my business if I die or become disabled” should be at the top on your list when trying to decide on a business formation.