Why Choosing the Right Legal Structure is Important

Opening your business will require capital, time, and effort. It means that you do not want any of these to be wasted just because you did not choose the right legal structure for a business.

Likewise, solving legal issues is a hassle, so you might want to start your business correctly.

Rewarding your new business with the right legal structure is the wisest decision you could ever make. Although it takes many processes that you need to comply with, rest assured that it will definitely bounce back to you in a good way sooner or later.

Choosing the Right Legal Structure

If you plan to begin your startup, you might want to take a look at the reasons why a legal structure is the best for you.

Choosing the Right Legal Structure Can Provide You with Limited Liability

You can opt to have few business legal structures, but a Limited Liability Company might be ideal for startups like you. One good thing about choosing an LLC is that it separates your personal assets from your business in case of losses.

If you plan to have an LLC as your legal structure and youโ€™re from Alabama, you might want to know how much an LLC costs in Alabama. That way you could prepare for it.

Typically, the fee for filing a Certificate of Formation is $200. Each state may be different! In my state of Rhode Island, the fee is $150.

However, the bordering state of Massachusetts is the highest in the country at $500. Most of these are reoccurring fees annually and some states are bi-annually.

You Get the Right Tax Your Business Deserves

Since there are different types of business legal structures, there are also different ways of incurring taxes. In this case, you do not want to be taxed the wrong way. It will surely make a big impact on your business.

You also want to be sure that you are legally operating based on the government’s tax policies, or else your business will be ordered closed by your state.

If you move from one state to another you may have to close the business in one state and start fresh in the new state.

Even if your business is small it’s best to get your business legally started right as you may grow that business bigger than you have imagined.

You Are in Control of the Business Operations

A legally structured business is guaranteed safe and protected from any legal issues. Consequently, you are in control of the operation, and you are always free to go global to meet great opportunities that will help you and help your business grow professionally.

Having a legal structure of a business is like giving your commerce a reputable identity that will represent you in the market.

reputable company

Moreover, if you continuously seek adventures in the business world, then a legal structure will surely put you on top of the competition.

Your Business Will Be Goal-Driven

Choosing a legal structure for your startup is a great way to induce goals you want to meet. Since you are now confident in running a legal business, you do not have to worry about your government chasing you or customers hesitant to trust you.

Therefore, you can focus on various ways to grow, especially those endless goals you want to achieve for your business.

The Top Reason Why Choosing the Right Legal Structure is Important

If there is one reason you need to know regarding the importance of a legal structure in your startup, well, it is the legitimacy of your business.

No one can hinder your business from growing and becoming successful because you are running your startup legally. There will be no hide-and-seek game from your state.

no hide and seek for your business


Hence, you can surely sleep peacefully at night knowing that your investments are all secured.

Don’t Forget Your Business Insurance

Lastly, don’t forget to get insurance for your business too. Here at Inspire To Thrive I do have a business insurance plan for the blog and for when I do client work.

Before I started out doing client work I had my business insurance all set up. My husband who owns his own company advised me to do so beforehand. (Check with your tax account for a business deduction as well on it!)ย 

No one wants to be sued or have to deal with a major lawsuit. Therefore, having business insurance can protect your business against that.

In Conclusion: Choosing the Right Legal Structure

Are you choosing the right legal structure for your business yet? Do you have any business structure for your blog or small business? It is not too late if you have not already done it.

I’d love to know more in the comments below from you.


Lisa Sicard
  • Hello Lisa,

    Awesome and very helpful post as usual. When we start a business, we should definitely work with its legal terms and makes everything uptodate. Without having a proper legal structure we might face serious issues in the future. Thanks for this post. I have bookmarked it.

    Vishwajeet Kumar

    • Lisa says:

      Hi Vishwajeet, thank you. Yes, it is better to get it right in the beginning so you don’t have to deal with a mess later. Do you have similar legalities in your country? Thanks for coming by and make it a great day there!

      • Yes, Lisa, In India, we have same laws and we need to make sure that we have prepared all the papers carefully. So, we don’t get screw up later.

        Vishwajeet Kumar

  • Hi Lisa,
    You have hit a very important subject that most don’t talk about. Your business needs legal structure. I use both offline and online business under an Inc. It is still a company in New York that is killing me with taxes, so I’m in the process of moving that company to the state I’m in now.
    When tax time comes, it is so easy to have everything bundled together under one corporation. All I have to do is print out my income and hand it to my CPA.
    Creating a corporation does help when tax time comes. One can write off so many things. So it is so important to have your legal structure in place.

    • Lisa says:

      Hi Donna, Yes businesses do need that legal structure. I’m an LLC here. And I have to transfer in the future from RI to Maine ๐Ÿ™‚ I bet NY is killing you with taxes, you’ll need to do that one soon Donna! Yes, the write-offs do help, and having the structure allows those write-offs. Thanks for coming by on this one and I hope you have a great rest of the day. Once I’m settled we have to get together. I’m going from 2.5 hours south to 3 hours north of you ๐Ÿ™‚

  • This is so important, yet often the importance is overlooked. Another thing to consider is the liability piece of it. Depending one what type of business you form, you could end up putting yourself in a place where you are 100% liable is anything happens. Great article, Lisa!

    • Lisa says:

      Hi Anthony, yes, and that was my point. You never know what can happen. Always best to be protected! I appreciate your coming by on this one, have a great rest of the day there ๐Ÿ™‚

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