The most common forms of businesses are sole proprietorship, general partnership, corporation and limited liability companies (LLC). The other forms are limited partnerships, registered limited liability partnership, registered limited liability limited partnerships and limited partnership associations.
The answer to the question “What structure makes the most sense?” depends on your individual circumstances and your goals for the future.
The type of business entity you choose will depend on liability, taxation and record keeping. It is best to first analyze and research your options and choose a structure that will meet your long term needs. This will avoid duplication of legal expenses, licensing and paperwork by choosing the structure that your business can grow with.
Learn more by reading Legal Structure and Registration in the Colorado Business Resource Book.
Articles and information on choosing your business structure from the Small Business Administration.
An article that discusses the considerations that should affect your choice of business structure. From FindLaw.
The pros and cons of different business types of ownership, including sole proprietorship, partnering, corporations, and limited liability companies.
Discusses the various types of business structures. Includes links to numerous outside sources. From HG.org Business Resources.
If you are a sole proprietor or general partnership and will be doing business under a name other than your own legal name(s), you must register your trade name(s) with the Colorado Secretary of State at sos.state.co.us. Registration of the trade name does not grant exclusive rights to the use of the name. Sole proprietors and general partnerships gain exclusive rights to their name through the use of the name over a period of time or by filing a trademark in addition to registering with the Secretary of State. If you want to find out if a name is already being used, visit the Secretary of State’s website at sos.state.co.us. Click “Businesses, trademarks, trade names” then “Search business database.” By searching this database, you can find out whether or not a name is currently in use.
If your business will be a Limited Partnership, Limited Liability Company, Corporation, Registered Limited Liability Partnership, Registered Limited Liability Limited Partnership or a Limited Partnership Association, you must file with the Secretary of State at sos.state.co.us. If you do business under an additional name, you must file a “Statement of Trade Name” with the Secretary of State. Corporations, limited partnerships, limited liability companies and limited liability partnerships organized outside Colorado must file for authority to do business in Colorado as a foreign entity.
For more information: Colorado Business Resource Book