Worksheet 3.1 Selecting the Best Business Structure

Worksheet 3.1 -- Selecting the Best Business Structure

Review the section on Factors in Selecting Your Business Structure.

Using a scale of 1 to 10, with 1 being disagree, 5 being agree and 10 being strongly agree, circle the number beside each of the following statements that best describe your situation:

1. I want the simplest way possible of registering my business.

Disagree Agree Strongly Agree 1 2 3 4 5 6 7 8 9 10

2. I want simple administration for my business.

3. I want complete control of my business.

4. I want to spend less than $100 to get my business registered.

5. Using the words Incorporated, Inc., Limited or Ltd., in my business name are not important to me. Disagree Agree Strongly Agree 1 2 3 4 5 6 7 8 9 10

6. I am concerned about protecting my personal assets.

7. I want to be able to raise extra money and capital for my business in the future.

8. My customers need to see my company as being very credible.

Disagree Agree Strongly Agree 1 2 3 4 5 6 7 8 9 10 9. The activities or products of my business could result in some personal harm to customers.

10. I am willing to pay lawyers and accountants to help me administer my company.

Worksheet 3.1 Results

1. Add the numbers you circled for questions 1 to 5.

TotalTotal forfor questionsquestions 11 toto 5.5.

2. Add the numbers you circled for questions 6 to 10.

TotalTotal forfor questionsquestions 66 toto 10.10.

If you scored 25 or more for questions 1 through 5, you should consider registering your business as a sole proprietorship or partnership.

If you scored 25 or more for questions 6 through 10, you should consider registering your business as a corporation.

If the totals for both questions 1 and 2 total over 25, the highest number indicates your preference for registering as sole proprietorship or partnership (#1) or corporation (#2). Similarly, if both scores are below 25, the highest number indicates your preference for registering as a sole proprietorship or partnership (#1) or corporation (#2)

Remember, many factors go into selecting the right business structure for your company. To make sure your score from the questions above are right for your situation, consider the importance of these seven factors to you:

Limited Liability Flexibility and Administration of Structure Income tax requirements Costs Length of Business Life Borrowing requirements and Attracting Investors Credibility

I have chosen to register my business as a: ______