Business Structure

My brother and I want to venture into an e-commerce business where we would create crafts and sell them online. When starting up a business, it is crucial to look into some factors in determining what kind of business structure would be more effective especially to an online business. Some of the factors to consider when deciding which business or legal structure is best for our company are: “how much control both of us intend to have on the business, how vulnerable the business is towards lawsuits, what type of tax implications will be impacted by the business structure we select, if we intend to use the profits to reinvest back into the business” (Bill, H., 2010). The most five major types of business or legal structure that most organization form are sole proprietorship, C-corporation, Subchapter S- Corporation, Limited Liability Company, and General Partnership.
Limited Liability Company which is normally known as LLC is the best business or legal structure option for our company and it can be defined as “an hybrid form of business organization that allows entrepreneurs and small business owners to enjoy the same limited personal liability that shareholders in a corporation have while retaining the status in a partnership” (Kubasek, N., 2009). The LLCs are the newest form of business organization in America and are essentially the creations of the state legislatures (Spadaccini, M., 2009). The reason why LLC is the best the option for our business venture is because of the flexibility it provides and also the tax benefits, being able to have the best of the partnership structure as well as the corporation structure is one of the factors that was researched on. Also given the borderless, rapid and uncertainty development of the ecommerce law and taxation, LLC provides a way because losses and profits are passing through to each member of the company, and the company is not being taxed which eliminates the double taxation that corporations are faced with....