What type of business should you start?
One of the first challenges new entrepreneurs face is deciding what type of business they should register. Although there are several different types of businesses, choosing one doesn't need to be difficult. Here are the 7 most commonly-used business types and some questions to help you pick which business type is right for your startup.
The 7 main business types:
Sole Proprietorship: The simplest type of business. Sole proprietorship are owned and operated by a single person and are very easy to set up.
Partnership: A business owned by two or more people who share responsibilities and profits.
Limited Partnership: A business partnership, often between business operators and investors.
Corporation: A type of fully-independent business with shareholders. One of the most complex business types.
Limited Liability Company (LLC): A mixture of a partnership and a corporation, designed to make it easier to start small businesses. One of the most popular business types for startups.
Nonprofit Organization: A type of business that uses its profits for charitable purposes. Tax-exempt, but must follow special rules.
Cooperative (Co-op): A business owned and operated for the benefit of the members of the organization that use its services.
Choosing the right kind of business
A startup's choice of business structure can have long-lasting effects on the way the business is run and operates, including how it files taxes and whether it can hire employees. To help you decide, we've created a flowchart to walk you through the decision-making process:
Click the source below to continue to the flow chart.