There are many forms of business organization open to you, but two of the most common are the sole proprietorship and the incorporated business.
Both can apply to small business; neither one is necessarily better for everyone. Which one is best for you depends on your personal situation and the stage of your business.
Here are some issues you should consider:
- Simplicity: sole proprietorship is a simpler business model.
- Tax: there could be tax benefits to incorporating your business.
- Cost: it usually costs more to incorporate and keep separate books.
- Liability: there can be greater liability exposure to the owner of a sole proprietorship.
Not sure? Ask someone!
While there is no single answer to what is right for you and your business, you should be aware of the issues. While you can incorporate without the help of a professional, it is usually not advisable. Having a lawyer or accountant go over what may best in your situation could place your business on a better foundation.