All companies adhere to power structure or organization system helping provide guidance and leadership to business. The common assumption as startup is that the person with the best idea, also known as the founder will lead a particular company as it establishes, grows and then matures. There are different startup company organizational types that are available for those who are planning to start their own business. These organizational types are outlined below:
Sole Proprietorship
If you got some profitable idea for a service or product and pour your tears, sweat and blood to launch a startup, then sole proprietorship is a highly considerable option for you. With this organizational type, you no longer have to file documents to be able to incorporate. All you have to do is simply open your shop and begin selling your exclusive products.
Sole proprietorship allows you to take control of your business or company and guide decisions as it continuously grows. Aside from complete control, other benefits provided by this type are cost effectiveness and simplicity.
Partnership
Establishing your own company as partnership is associated with so many risks and problems. General partnerships enable two or even more individuals to share operation and management of an entity while limited partnership on the other hand establishes diverse categories of partners.
The general partners in the limited partnership are allowed to manage daily operation of the business while limited partners have the ability to determine the person who will manage but are not allowed to manage personally. Partnership is easy to organize and manage and is flexible enough to adhere to unique and changing needs.
Limited Liability
Another startup company organizational type is the limited liability. The most typical organizational type under this category is the LLC or Limited Liability Company. This company requires filing of organization articles with state secretary in the specific region where your business will actually operate. LLC provides flexible ownership form that is beneficial for tax planning. In limited liability organization type, members are protected from the personal liabilities that stem from business actions.
Corporation
This organizational type is a bit complicated and challenging to start and this needs more responsibilities when it comes to tax compliance however, shareholders are certainly protected from the liability. Moreover, there are various tax planning strategies and options available to corporations that may not be applicable or available for other forms or organization.
The major benefit of corporation is the known liability protection that it offers to shareholders and owners. The liability is limited because corporation is one legal entity separated from shareholder owners. This is the most widely utilized and best known organizational type.
There are plenty of different types of organizational structure for startups. If you are now ready to incorporate, you can contact Inc Plan (USA) and take advantage of a 30 minute free consultation talking about the business that you want to pursue. Working with the company can benefit you in various ways. Inc Plan helps you find solutions and techniques that work for you exclusive business. The company is even willing to answer all the remaining questions that you have regarding how to start a company.
