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Should You Go It Alone?

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

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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