There are several factors to consider when choosing a business structure, including the type of business, the size of the business, the number of employees, and whether the business will be publicly traded. The most common types of business structures are sole proprietorships, partnerships, limited liability companies (LLCs), and corporations.
Sole proprietorships are owned by one person and are not required to file paperwork with the state. Partnerships are similar to sole proprietorships but there are two or more owners. LLCs combine features of both sole proprietorships and partnerships and can have either one or multiple owners. Corporations are businesses that have been legally registered with the state and have shareholders who own stock in the company.
The type of business you have will partly determine what type of business structure is best for you. For example, if you have a small retail store, a sole proprietorship might be the simplest option. If you're starting a tech company with multiple co-founders, an LLC might be a better choice. And if you're running a large publicly traded company, then incorporating as a corporation is likely your best bet.
Once you've determined which type of business structure is right for your company, you'll need to file paperwork with your state's secretary of state office and pay any associated fees. You'll also need to obtain any licenses or permits required by your city or county government before you can start operating your business