Legal Structures for Startups: Choosing the Right Entity for Your Business
When you're getting your startup off the ground, one of the first and most important decisions you'll make is choosing the right legal structure. It may not sound glamorous, but it has serious consequences for your taxes, your liability, your ability to raise funding, and how smoothly your business operates as it grows. The right entity can protect your personal assets, simplify your taxes, and make you more attractive to investors. The wrong one can do the opposite. You want to pick a structure that supports your goals—not one that creates roadblocks. In this article, I’ll walk you through the main types of business entities , show you where they work best, and help you figure out what fits your startup’s needs today and as you scale. Sole Proprietorship: Simple, But High Risk If you're starting a business on your own and want to get going fast, the sole proprietorship is the default choice. It’s the easiest structure to set up—no formal registration required beyond a loc...