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4 Key Elements To Choose A Business Structure


Rachel Ng

New Member
From my experience of registering many businesses all around the world for my clients, almost of enterprises wasted much time choosing a business type before forming it or choosing one were not suitable for them. The point is they don't usually set up a list of elements for choosing a business type. In today's content, I will specify some determining factors to pick the right entity type for your company.

1/ Control and responsibility: Different entity types provide the owner with a certain level of control and responsibility. Being the only owner of a business will grant you more control than being the company’s partners, members, or shareholders. However, with great control comes greater responsibility. For instance, if you’re the sole proprietor, you can control every aspect of the business, but you also have to carry all the work and responsibility. Other forms of business, such as partnership, may offer less ownership, but in return, the responsibility can be divided and spread among several principals.

2/Extent of liability When choosing business structures, also consider to what extent you would like to protect your assets and liabilities. Some entity types provide limited liability protection, which helps safeguard owners’ assets in case the company goes bankrupt or suffers a loss. In contrast, unlimited liability businesses mean the owners will hold complete responsibility for any debts or legal issues of the company. Business owners should take into account this factor as it will affect their implications on potential liability.

3/ Tax implications The type of structure you choose may greatly determine business taxation and which taxes you must pay. The reason for this is that each business form is treated differently by tax authorities. For instance, sole proprietors are normally taxed at the personal level because the owner and the business are considered the same legal entity. For other entity structures such as an LLC or corporation, business owners will possibly pay corporate tax and personal tax, or additional specialty taxes imposed by the government.

4/Incorporation complexity Each form of legal entity has distinctive setup procedures, costs and complexities involved. It is recommended for entrepreneurs to choose a business structure that can be set up easily or without any difficulty, involves reasonable expenses in formation and minimum legal formalities

Hopefully it brings some useful things for your company


New Member
good tips
it was interesting to read them and also useful