The end of the year is fast approaching. This can be a good time for small business owners to take a detailed look into what the current state of their company is and how the year has gone. Such a review can help inform a business owner on what changes he or she may want to start making regarding his or her company as the new year approaches.
There are many things that business owners may need to change as their company’s situation and needs shift over time. A few examples include their business plan, marketing strategy and workforce situation. In some situations, a change to a company’s legal structure may be in order.
One key aspect of a business’s structure is its entity type. There are various entity types for businesses, including: sole proprietorships, partnerships, LLCs and corporations. Each entity type has its own unique characteristics when it comes to structure, rules, liability and tax issues.
Having an entity type well-suited for a company’s circumstances and one’s goals for the business can be very important for entrepreneurs. Now, such circumstances and goals can change over time, thus potentially shifting what a business owner may want for his or her company when it comes to entity type.
So, among the things business owners may want to look into with the end of the year approaching is whether the entity type they currently have for their business is still a good fit, or if their goals might be better served by switching to a different type. When company owners are considering making an entity type change, business lawyers can give them guidance on what effects the change would have and what the process of making the change would entail.