Should I start as a sole proprietor or form a company?

Sole proprietorships are cheapest and simplest for low-risk, low-profit work. Once you take on bigger contracts, premises, staff or meaningful profit, a company (LLC, corporation, Pty Ltd or Pvt Ltd) usually makes sense for liability protection and tax planning.

What structure do investors want?

Venture investors generally want a Delaware C-corp in the US, a corporation in Canada, a Pty Ltd company in Australia or a private limited company in India, because those can issue preferred shares and stock options.

Can I change my structure later?

Yes. Many founders start as sole traders and incorporate later, but converting can trigger tax, new registrations and new contracts, so it's cheaper to choose well at the start if you already know you'll grow.

Does this store my answers?

No. The quiz runs entirely in your browser.

Business Structure Picker · Startup & industry

Business Structure Picker: LLC, Corporation, Sole Trader or Pvt Ltd?

Seven questions to find the right legal structure in the USA, Canada, Australia or India.

100% free
No sign-up
Runs in your browser

Question 1 of 7

0/7 answered

Where will you register?

How much could go wrong if a client sued you or a big deal failed?

Options in United States

Answer the questions and the structures available in United States re-rank as you go.

01Sole proprietorship
- Cheapest and fastest to start
- Simple tax: profit goes on your personal return
- Unlimited personal liability
- Self-employment tax on all profit
- Hard to bring in partners
02LLC
- Limited liability
- Flexible ownership and profit splits
- Light ongoing admin
- State filing and annual fees
- Self-employment tax on all profit by default
- VCs rarely invest in LLCs
03LLC or corporation taxed as an S-corp
- Can cut self-employment tax once profit is healthy
- Keeps pass-through taxation
- Payroll and reasonable-salary rules
- Max 100 shareholders, US persons only, one class of stock
04C-corporation
- What investors expect
- Stock options for staff
- Flat 21% federal corporate tax on retained profit
- Double taxation on dividends
- More formalities, filings and cost

Each answer adds or subtracts points for the structures available in your country; the ranking shows relative fit, not a legal opinion. General information, not legal, tax or accounting advice. Rules, fees and thresholds change and vary by state, province and city, so confirm each step with the official source or a qualified adviser.

How it works

How to use Business Structure Picker

Pick the country where you'll register the business.

Answer the seven questions; the ranking updates after each answer.

Review the pros and cons, then build your launch roadmap for the top pick.

About

About this tool

Your business structure decides how you're taxed, how much personal risk you carry, how much paperwork you'll do and whether investors can back you. The options differ by country: LLCs and S-corps in the US, corporations in Canada, Pty Ltd companies and trusts in Australia, and LLPs, OPCs and private limited companies in India.

Answer seven plain-English questions about risk, investors, owners, profit, admin and your long-term plan. The picker ranks the structures available in your country as you answer, and shows the pros and cons of each.

When you're happy with the top pick, jump straight into LaunchT3 with that structure pre-selected to get the registrations and documents it needs. Structure choices have real tax consequences, so check your shortlist with an accountant.

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