Entity Selection Questions
Small Business Development Center
Right Start
Entity Selection Questions
- Nature of business activity (e.g., product sold, services offered or both)?
- Is business for-profit or not-for-profit?
- Current and future need for partners (including spouse) and/or capital?
- Exit strategy/continuity of business and/or ownership?
- 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?
- Size and scope of proposed business:
Home-based or off-site “store front”?
Hiring employees and/or contractors?
Franchise or independent venture?
- Risks, liability and insurance needs?
- Business activity prior to incorporation or organization?
- Cost considerations of start-up and subsequent compliance?
- Desire for current and/or deferred tax benefits?
- Probability of company moving out of state in the future?
- Probability of company being financially successful?
THERE IS NO PERFECT ENTITY STRUCTURE.
