Forms of Business Organization

When you start a business you have to choose a form of organization. There are basically four: a sole proprietorship, a partnership, a corporation, or some hybrid form.

The simplest form of organization is a sole proprietorship. You're out there, doing it, your own boss, and so on. Just get a domain name, put up a website, get some cards, whatever collateral materials you need. You're in business. Your record your revenue and your expenses on a schedule C and you're good.

I recommend people start out as simply as possible but no simpler. It maybe that a sole proprietorship is insufficient. You may have partners and you may want to hire employees or you may want to set up something that will out live you. Then you might want to consider some hybrid form.

You need to consult an attorney and a accountant who can advise you about what's specifically best for you. Start simple. Don't get ahead of yourself.

Back in my early days, you had three forms: a sole proprietorship, partnership, and corporation. You could elect sub chapter S if you were incorporating. Now you have more options.

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