How To Choose The Right Business Structure

Choosing a business structure that is efficient, practical, and suited to a company’s best interests is fundamental to its success.

When a business undertakes commercial activities – such as capital raising, marketing, and tax payments – its structure becomes integral to both immediate and long-term success.

Knowing which options are on offer and the pros and cons of each is important when making the right choice. In the US, there are several key legal entities a business owner can be capable of forming.

Sole Proprietorship

A Sole Proprietorship is the simplest business structure to establish. The unincorporated structure revolves around a registered person, officially responsible for the operational effectiveness of the business, as well as ongoing adherence to relevant laws and regulations.

Perhaps the most distinctive aspect of being a Sole Proprietor is that the business and the owner are not separate legal entities. This can result in the registered owner being held personally liable for the enterprise’s assets and liabilities.


The key characteristics of a Partnership are somewhat obvious – it is a business structure designed for two or more people. When a person wishes to embark on a joint enterprise, they will come to a simple agreement as part of an official Partnership.

As the name suggests, a Limited Liability Company (LLC) describes a business structure that limits the legal liability of the relevant person, equivalent to the sum of their investment or stake in the company.

Limited Liability Company (LLC)

A Corporation is an entity distinct from its owners, taking on a new legal persona. The new legal identity can enter into contracts, be sued, initiate litigation, own assets, and pay taxes. Corporations possess many of the same rights and responsibilities as individuals.


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