New Venture Lab: Equipping Christian Entrepreneurs

Question

Which legal structure is best for a home-based business?

Answer

It depends upon the context of the business you are establishing, but you can always change the structure later if you need to.  I recommend starting out as a sole proprietor until you get the business fairly well established and then a pass-through entity such as an S corporation or an LLC would most likely work best to protect your liability and to minimize corporate taxes.  I like the LLC structure the best for an established small business.  If you plan on raising venture capital, you will need to switch to a C corporation, but you can wait until the investment is imminent prior to doing that.  Be sure to consult a good attorney and a CPA for more assistance.