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How to Structure Your Business - Black Business Builders Club
http://blackbusiness.rhondakaye.com
316.665.6918

How to Legally Structure Your Business- Black Business Builders Club
http://blackbusiness.rhondakaye.com
316.665.6918

According to the IRS you find out how to structure your business. However, you really need someone who will sit down and discuss with you which one of these structures you should select.

Business Structures

It is important to find out how the company is structured legally. The type of business structure used will affect your purchasing strategy as well as the eventual price.

Sole Proprietor

Under a sole proprietorship, the business is owned in an individual capacity. The assets are held in the name of the owner, individual, or individuals who own the business. When buying a sole proprietorship, you should determine if you are buying just the assets or both the assets and liabilities.

Partnership

Under a partnership, the business is owned by a group of two or more entities. This could prove more difficult; therefore it is important to see the partnership agreement to make sure that the people you are dealing with have the authority to act on behalf of the partnership.

Corporation

When you are buying from a corporation, it is important to determine the best way to structure the purchase. You must determine if you are going to buy the corporation itself (stock purchase) or buy only the assets, leaving the original corporation intact. In most situations, you will be much better off buying the assets of the corporation rather than the stock. The following are advantages of purchasing the assets alone:

* It helps you avoid the liabilities of the existing business,
* It gives you receive significant tax advantages,
* It helps you avoid acquiring unwanted assets from the corporation, and