Hello , Welcome to today's newsletter.

If you remember, in one of the previous letters, I put out a discussion on the various categories of structures that you can have for your business.

Today, let us talk a little bit more about the major factors to consider before choosing a particular structure for your business.

1. Nature of Business.

The type of business you intend to go into determines the type of registration to do which of course determines the type of structure that you will have in your business.

Some businesses by their very nature require a limited liability company registration.

But those that are not highly regulated can be registered under the business name category.

Where a person intends to just carry on the simple art of buying and selling or offer unregulated services then a simple business name registration can work.

2. Whether you intend to raise funds from investors.

When you intend to raise money for your business through equity funding, then the best thing would be to float your business as a Company limited by shares.

This so will enable you to give a fraction of the shares to private investors in exchange for the funds or investments in your business.

A business name enterprise or Venture by its very nature has no potential value to an investor as an enterprise can't issue shares before the law.

3. Do You intend to partner with other people?

If you are going to be partnering with other people, then you need to float your business as a Limited liability Company.

This is to help you clearly state the value of contributions, investment or stake in the business in the public document of the company (Memorandum and article of Association).

However, where you still want the regular partnership business as in a business name or an enterprise with your interest defined, then you would need to enter into a thoroughly drafted Partnership Agreement or Founders Agreement.

4. The need for more options.

If you want to be able to do more than three(3) types of businesses under one umbrella without having to register each business separately then the best structure for that is a ltd Liability Company.

A ltd liability Company registration can accommodate as many as 10 different businesses but an enterprise cannot go beyond just three related businesses.

5 .  Legal protection

If you would like to have more legal protection for your business and personal assets then, a Ltd Liability Company registration against a business name is a better option for you.

Under a ltd liability Company, the liabilities of the members are limited but for a business name, the liabilities are unlimited.

When you properly consider these issues, you will be in a better position to know the best structure that will work for you.

Like I always say, don't money be one of the things that will make you choose a particular structure over the other.

If you do, you will spend more in the future to correct your error.

Let me know how you would like us to help you with your business structuring.

Cheers!

-Barinaada