Forming a Legal Business Structure


As you work on your business plan, you will need to determine the legal ownership structure for your new business. This must be done prior to registering your business with the state. There are many different business structures and each has its pros and cons, based on the size and nature of your business and specific tax issues and concerns related to the potential owner(s). Some of the more common structures include:

  • Corporation
  • Limited Liability Company (LLC)
  • Partnerships
  • S Corporation
  • Sole Proprietorships

A detailed discussion of the differences, benefits and costs of each can be viewed at the U.S. Small Business Administration page.


Before making this very important decision, it is highly recommended that you consult an attorney and/or accountant to discuss your business to determine which structure might best fit your needs. Also, as your business grows and changes, it may be necessary to change the legal structure of your business. Again, consult an attorney and/or account to discuss this and the ramifications it may have on your business operation.