When you have an idea for a startup in Oregon, you need to figure out what type of legal structure to adopt. This decision has many implications. It may impact everything from how you pay business taxes to the compliance requirements to which you must adhere.
Per Entrepreneur, there are a number of important considerations associated with choosing a business structure for your company. When weighing the advantages and drawbacks of different business structures such as sole proprietorships, partnerships, corporations and limited liability companies, consider the following.
The type of business structure you adopt impacts whether your personal assets may be at stake if someone files a lawsuit or wins a judgment against the business. If you have serious concerns about personal liability, you may want to adopt a business structure that offers protection in this area. Such structures might include that of a limited liability company or an S corporation.
Some business structures offer more tax advantages than others. However, there are tax implications associated with whatever structure you choose to create. Certain formation types, such as S corporations, protect your company against double taxation, which is a drawback associated with incorporating your business.
Some business structures take more time and effort to operate than others. Some structure types also have specific rules about holding annual meetings and maintaining certain types of paperwork. There are often costs associated with the record-keeping certain business structures require. So, it is wise to consider these expenses when choosing a business structure.
Keep in mind that you may be able to alter your business structure, should your business needs change in the future.