You have a great idea for a new product or service, and you can’t wait to turn your dream into a reality. But before you get carried away, you have to give your business some structure. Choosing the proper business structure, also known as a legal entity, is one of those foundational aspects of planning your business that can make or break your future success. Your choice will determines important aspects of your business, including your level of protection from personal liability (if any), how profits are taxed and how you can raise money, just to name a few. And with so many entities to choose from (e.g. S-Corp, C-Corp, limited liability corporation (LLC), Sole Proprietorship, Partnership), how do you go about deciding which one is best for you, your business and your expectations?
As Klickly founder and CEO Cooper Harris explains, it will depend not only on what kind of business you are launching, but your expectations for it as well. In her case, she decided to incorporate Klickly as a Delaware-based C-Corp, because the Delaware General Corporation Law is one of the most advanced and flexible corporation statutes in the United States. But just as all business are created equal, as Cooper explains further, one structure does not fit all. If you’re running a business with a social mission, you could opt for B-Corp recognition, or even skip the pursuit of profit entirely. You have a choice, and it pays to consider which one is right for you.