The general definition of business structure is the kind of relationship the owner has with his or her business. In other words, this is the legal relationship between the business owner and the business itself and affects how the owner files taxes. In a sole proprietorship, for example, the owner and the business are one entity and thus only one tax form is required. Conversely, in a corporation, the owner and the business are separate entities. As such, the owner and the corporation must file taxes separately.
Below are outlines of the different structures that you can use for your business. These present business structure basics. For most people, the primary consideration when picking their business structure is money - how much will filing for a Private Limited Company cost? Or does a Private Business Corporation cost anything?
Many small business owners make the mistake of over-looking liability. Some business structures protect you, the owner, from personal liability (as long as you do not abuse those rights of course), while others do not offer such liability protections. As a small business owner, you should sit down and really think about the potential of you being sued. If you are running a brick and mortar store, then you are more likely to be sued than someone who is selling their items online and is not inviting customers into a physical location. If you are running a day care centre from your home, than you are more likely to be sued than someone who makes children's clothes. So, really give this some thought. If you decide that you are in a position where someone will likely sue you, then do not risk your personal assets.