While changing your business structure can be complex, sometimes it is necessary to stay on the side of the law and protect the time and money you invested in building the company.
Many first-time entrepreneurs start with a sole partnership. They are relatively quick, easy and cheap to set up, but as your business grows, you may soon discover their limitations.
For example, it could expose you and your personal possessions if someone files a lawsuit against the company. Hence you might wish to separate your personal life from your business life by using a structure that limits your liability.
Perhaps you realize that going it alone is too hard
In this case, you might wish to change to a partnership where you can share the responsibilities of running a company with one or more others.
Maybe you need more money to expand
Sometimes the way to faster growth is through pumping in more capital from third parties. To do this and give your investors the guarantees they need, you will need to look at a more complex business structure and register your company as some kind of corporation.
It can also have a significant tax advantage as corporations only have to pay 21% tax, whereas sole proprietors could end up paying up to 37% if they earn well.
You might never have dreamed of reaching this point when you first started, but as many enterprising people with great ideas have discovered, getting legal help will be essential sooner or later. Taking proactive business guidance is the best way to reduce the chance you need the advice to defend your company over a legal dispute.