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Should You Go It Alone?

The pros and cons of the sole proprietorship and other legal structures

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This story appears in the December 2002 issue of Teen Startups.

When it comes to starting a business, there just seems likethere is so much to do, from deciding on a name to getting theright permits and licenses, and even finding the right officespace. So while you don't need one more item added to yourto-do list, you also don't want to overlook what could be yourmost cost-effective--or costly--decision: your business's legalstructure.

Should you go it alone? Get a partner? Incorporate? When itcomes to making the right choice for your business, there's noone-size-fits-all answer. While the options for a new company arenumerous, most teen-owned businesses fall into one of these fourcategories: sole proprietorship, partnership, S corporation or Ccorporation, each with its own set of advantages and disadvantages,from the risk of liability to income taxes. But, to start out, manyentrepreneurs choose the sole proprietorship.

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