Chapter 2Selecting the Best Legal Structure for Growth

Now you’ve got an idea of the basic kinds of equity and debt strategies that you might use in your search for capital. But before you start looking for money, you should decide on the best business format for you, even if you’re already in business. Choosing the appropriate legal structure—proprietorship, partnership, corporation, or limited liability company—or changing the structure that you currently have is a complex issue because of the inherent tax consequences and liabilities of the owner(s), and because the structure selected will determine what capital-formation options are available to you. Many factors will affect your choice, including the number of owners involved, the need for ...

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