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1.4 Legal Business Structures

Business Structures

Video courtesy of Fit Small Business. (http://fitsmallbusiness.com/llc-vs-s-corp-vs-c-corp/)

Activity

When a legal professional meets with you, be courteous of her/his time and articulate exactly what your legal needs are, and what you hope to achieve by visiting with them. List at least three major questions you would like answered regarding how best to select a business structure that is appropriate for you.

Share these questions with your attorney or advisor and take notes for your records. Make sure to provide as much information as possible regarding your current business activities and your future business goals. Use the questions below to help you organize this information.

Reflection Questions

1. Are you currently selling artistic products or services?

2. If yes, have you actively thought about what type of business entity is most appropriate for your business other than being a sole proprietor?

3. What obstacles have you faced in identifying what type of entity would work best for your business?

4. Different types of business entities have different levels of personal risk of liability. How willing are you to take on personal liability associated with your business activities? In other words, is risking your own personal assets (your home, car, etc.) more or less important to you than minimizing tax burdens? 

5. Is a nonprofit right for you? 

  • Is the primary focus of your work for the greater good? 
  • To what degree do you want to maximize your management control over your business rather than a board of trustees?

6. Choosing a business structure can have a long-lasting impact on your business’ ability to succeed. Given the complexity of the topic, the Artist as an Entrepreneur Institute highly recommends seeking out assistance from a trained legal professional. Do you currently know an attorney or other trusted professional who has expertise in business transactions and would be willing to assist you?

Resources

Volunteer Lawyers for the Arts, a pro-bono service of the Cleveland Metropolitan Bar Association

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