Going into business is never an easy process. There are a lot of things you need to consider, such as choose a field, research rates of success in said field and also find the best angle for your business approach. Then you need to hire people to work for you performing various tasks, and also potentially contract a good accounting firm in order to keep your books for you and make sure you receive maximum profits with minimum spending.

But by far the most difficult decision you need to take when venturing into business is choosing the right structure for your endeavor. In case you didn’t know this, there are quite a few business structures out there, and each of them is suited for a finite set of things. Let’s first see what the different business structures to take into consideration are.

1. Company

A company is arguably the most well-known and popular business structure out there. However, it’s not the cheapest and fastest solution out there (we’ll see soon which are) because it consists of a separate legal entity altogether that you need to set up expertly. A company has additional reporting expenses, as well as shareholders, directors and varying degrees of personnel.

2. Sole Traders

A sole trader is the basic level of business structures. It’s also the cheapest and easiest to set up due to the fact that it has very few legal regulations and tax clauses behind it. You as a sole trader hold total control of your business and its management, so this might be a good start point for you if you’ve never established a business before.

3. Partnership

Partnerships are also relatively inexpensive and also simple to form and manage, but you need to find a suitable and trustworthy partner. If possible, try not to partner up with friends or lovers, because we all know how fickle human relationships can be. Instead, try to find a likeminded individual that shares your business vision and don’t spark up business partnerships based on affectionate relationships.

4. Trust

A trust is by far the most complicated one out of the bunch. It is the god tier of all business structures, and you shouldn’t attempt building one unless you’ve been in the game for long enough. However, a trust can be represented by either a company or just an individual, and all the profits then go to select beneficiaries. So if you’ve got the juice to fuel such an endeavor, it can be quite a profitable initiative.

How to Choose

Now that we’ve laid down all these four separate business structures and explained some of their pros, cons and prerequisites, it’s time for you to make your choice. In order to do this, you need to assess which of these structures is right for you and your business model. If you’re in it to win it, you will make the right decision for sure.