The legal structure that you use to organize your business means everything to its success. By reviewing the options, you can find a legal organizational structure that’s right for you and everyone else involved in your Missouri business.
How to choose the right structure
When you’re picking an organizational structure, try to think about the big picture of your business. These structures are designed to function in the long term and don’t necessarily come into play very often in your everyday work life.
But when it’s time to pay your taxes, you’ll definitely be thankful that you’ve chosen the right structure. Your business structure will also be relevant if you’re looking for a loan or to attract new investors.
No one ever wants it to happen, but it’s crucial to consider the possibility of someone filing a lawsuit against you. If you have to go to court, your organizational structure may help or hinder the process depending on the type you’ve chosen.
You can still alter the legal structure of your business further along in the process. However, it’s much better to start with the right thing rather than having to do a major course correct later on. There’s the chance that you’ll already have enough to deal with at that point in your organizational journey.
Legal organizational structure can make or break a business. Some of the most common types are:
- Limited partnership
- Non-profit corporation
- Professional LLC
- Professional association
- Professional corporation
Sole proprietorships and general partnerships
A sole proprietorship is the simplest and cheapest option. You won’t be bogged down with the particulars of corporate law in the setup phase, and maintenance is next to nothing. All you really need is a placeholder company name. This is known as “doing business as,” or DBA.
To have a general partnership, there must be at least two people with joint ownership of the business. It’s a good fit if you want something that’s simple. You don’t have to file with your state, and you won’t have to worry about keeping up with reporting requirements because there aren’t any.