• 2022-06-01

Navigating Business Structures: Choosing the Right Entity for your Start-up

So many people want to venture into business but have no clue about the ideal legal structure for their businesses. Some start without a well-thought-out structure of how the business should be run and legal structure to accommodate expansion.

There are a number of factors that could guide a person in making the right choice for his or her business. The questions below would aid such decision-making:

1. What is the nature of the business I want to venture into?

2. Is the intention to make a profit, or is it a charity organisation?

3. What is the start-up capital?

4. Are there other partners in the business venture?

5. What are the areas the business covers, and is there room for expansion beyond its start-up capacity and location?

Providing the answers to the above questions and consulting with a lawyer will determine the right business structure suitable for your business. 

With these, a lawyer is able to advise on whether it is a sole proprietorship, partnership, Limited Liability Company or an Incorporated Trustee that is suitable for the business. Every start-up needs a lawyer on this subject matter because there are rules guiding the establishment and running of businesses. 

After discussing the business idea with a lawyer, the lawyer can also use the above information to advise on a suitable name to reflect the business idea before proceeding to register with the Corporate Affairs Commission. 

The name of a business goes a long way in reflecting the structure of that business, and that is why it is very essential for start-ups to engage a lawyer from the beginning of any business venture. 

Do you have a business idea you want to make a reality? Talk to us at LegalEpp.