3 Reasons Why Sole Proprietorship Isn’t the Best Choice For Scaling or Selling Your Business

Nina L. Kaufman, Esq.

Nina L. Kaufman, Esq.

An award-winning small business attorney in New York City, Nina is a sought-after professional speaker and Entrepreneur Magazine online contributor. She is the go-to counsel for knowledge economy and creative companies, delivering legal services and educational resources that save them time, money, and aggravation.

Posted on May 10, 2015 in Form a Company

Should I operate business as a sole proprietor? You certainly can, but is it the smart decision for your business – particularly if you want to scale or sell down the road? In this 60 second video on Entrepreneur.com, I outline the 3 serious reasons to consider forming a formal business entity.

The chief appeal – especially for a brand-new entrepreneur – is that a sole proprietorship is a simple solution. Choosing your business’s legal form — sole proprietorship, S corporation, C corporation, Limited Liability Company (LLC) – is an important decision as the owner of your business. While sole proprietorships are the easiest and least expensive type of business to start, there are legal issues that may increase your risk as a business owner when operating as a sole proprietor.

Lastly, smart, savvy business owners keep the end game in mind at every stage of their business. Are you looking to scale and your business in the next few years? Do you have an exit strategy that includes selling your company? It’s important to consider these factors when deciding on your business’ legal entity.

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