Starting a business is exciting, mind numbing, and most of all, a step in a direction where you are in full control of your own lifestyle. The second place most small businesses start, after coming up with the big idea, is the name. (Sometimes a good small business name comes first, then the detailed workings of the business direction come out.)
There are a range of different business registration types. Lets take a peek on what they are. (These might be different, and have different restrictions depending on your country.)
Sole Proprietorship
Individuals commonly form sole proprietorship businesses. They are simple to form and operate, with far less legal controls, fewer taxes as well as flexible management options. One drawback for this type of business registration is that it involves personal liability. The owner risks his/her personal property for all unpaid debts the business incurs.
Partnership
This type of business setup is common for two or more individuals who agree to contribute money, labor or skills. Partnership types include general, limited, limited liability and limited liability limited. A general partner and limited partner make a limited partnership. The general partner manages the business and the limited partner shares in the profits, but his liability is limited to his investment. In limited liability partnerships, the partners don’t have personal liability for the negligence of the other partner. A limited liability limited company shields limited partners from liability while a general partner or partners run the business.
Limited Liability
One or more individuals or entities enter into a special agreement to form a limited liability corporation (LLC). The agreement details the LLC’s organization including management provisions, separation of interests and distribution of proceeds and liabilities.
Corporation
Corporations offer a more complex legal structure. The corporation owns rights, liabilities and privileges beyond those of the individuals forming the company. Corporations may receive more tax or financial benefits, but will also have decreased personal control as well as increased licensing fees that can erase the tax or financial benefits.
Nonprofit Corporation
Individuals typically form nonprofit corporations to further a cause or goal rather than make a profit. Many nonprofits serve public interests; others operate in the private sector. Nonprofit organizations may need to apply for additional registration to conduct charitable events. Charitable organizations don’t distribute surplus funds to shareholders or owners. They usually use the funds to help further the nonprofit’s cause. Nonprofits may receive tax exempt status.
You’re well on your way after you choose your business name registration type. From this point, your local governments online business name registration website (or government services location) will ask you to submit for a name check to figure out if there are any similar businesses in your market that have the same or similar business name. Good luck with the availability of your small business name!
Your local government should have additional online resources available to you, as well as consultants to discuss what business registration makes sense for you.
The next step is to get your SOHO (small business, home office) website up and running and start communicating to the world, or local market, what it is you do!
Stay tuned for helpful articles on how to choose a proper domain name, building your small business web strategy, and how to start on the path of designing an effective small business website.
