What type of business should I mark my business to operate as?

Question

I'm almost done with my business plan. I'm stuck on something. I don't know sould I operate my business as a Corporation or Sole Prietorship if I'm planning to run a photography and graphic designing business with employees I'm planning to hire which will include a secretary, assistant, graphic designer and a beautican. Please help I'm planning to open and start at the beginning to 2010.

Answer 1

Hi L Ant,

It's an important question.

Do you have anyone else involved; a spouse? Have you defined an exit strategy? Is your investment from savings or outside sources?

What kinds of local tax or building incentives will you be taking advantage of? Other govt incentives?

A corporation offers some additional protections from some liabilities, but you will have to bring additional people into positions of ownership. Minor, perhaps, but it is certainly a consideration.

Talk to your accountant, and your attorney. Try to think of what might go wrong, and what advantage/disadvantage each form of ownership would provide. Then, try to estimate the risk involved.

Examine the differences in rates for your liability, worker's comp insurance, see if those make a difference.

Good Luck!