Entity Selection Questions

Small Business Development Center

Right Start

Entity Selection Questions

1. Nature of business activity (e.g., product sold, services offered or both)?

2. Is business for-profit or not-for-profit?

3. Current and future need for partners (including spouse) and/or capital?

4. Exit strategy/continuity of business and/or ownership?

5. Ownership:

Owner-operator or investor?

Part-time or full-time involvement (e.g., hobby, second job or business)?

Active ownership, absentee ownership or contracted management?

Owner’s investment in company and feasible need for outside funding? 

6. Size and scope of proposed business:

Home-based or off-site “store front”?

Hiring employees and/or contractors?

Franchise or independent venture?

7. Risks, liability and insurance needs?

8. Business activity prior to incorporation or organization?

9. Cost considerations of start-up and subsequent compliance?

10. Desire for current and/or deferred tax benefits?

11. Probability of company moving out of state in the future?

12. Probability of company being financially successful?

THERE IS NO PERFECT ENTITY STRUCTURE.