Starting a new business is an exciting step for many who have long dreamed of being entrepreneurs. For you, your company may have started with a simple idea, and now you are ready to face the future and begin taking the necessary steps to take your idea to the world. While most businesses do begin with an idea, it is important to fully understand the other important things you need to do in order to have a successful company.
Starting a business involves much more than having a plan and launching a social media page. You will need to make crucial legal and financial decisions that will allow you to operate effectively. Before you move forward, you will benefit from taking the time to understand all of the requirements you must meet, starting with deciding on your business entity.
The role of a business entity
A business entity is the structure of an individual business. It determines how a business will operate, how it will pay taxes and how much risk you will take with your personal assets as the owner. There are various options for how you can structure your company, and the right selection depends on factors that include everything from whether you have a business partner to the level of personal liability you are willing to take. Options for business structures include:
- Partnership — This is a business entity for companies that have more than one founder. Partners share debt burdens taken on by the company, and they share profits.
- Sole proprietorship — This structure is for a sole owner who will report business profits on his or her personal tax returns. He or she is solely liable for business debts.
- Limited liability company — This type of company limits the personal liability of the owners while providing flexibility regarding taxation.
- Corporation — There are different types of corporations for companies that have shareholders and function on a larger, more complex level than a small business.
Knowing what is right for your specific business plans is critical. You will benefit from seeking experienced guidance as you navigate the earliest stages of starting your own Oklahoma company, such as deciding which entity is best for you. An assessment of your goals, your business plan and other details can provide you with the insight you need to make decisions that will preserve your interests and lay the foundation for future success.