Choosing a Form of Organization

Whether you've purchased an existing business or started one from scratch, you must decide which form of organization (sometimes referred to as "business entity") is best for your company. The decision can be difficult to make. There are several choices, and each has its advantages and disadvantages. Make sure that you consult with your attorney or accountant before making a final decision.

Choose one of the following:

• sole proprietorships
• partnerships
• limited liability company
• limited liability partnership
• corporations
• s corporations
• tax-exempt organizations

Remember, the form that you choose isn't permanent. If the circumstances of your business change, you can always change the form of your business. For example, you may start your business as a sole proprietorship, but, as your business grows, you may take on a partner and become a partnership. Or, you may choose to incorporate to protect business creditors from pursuing your personal assets.