Many small businesses are started with a very simple structure.
Typically, the owners of the business are the sole shareholders of
a single corporation in which the active business operations are
conducted, which I will refer to as the operating company. In the
event a business owner is conducting business as a sole proprietor
and has yet to incorporate, it is likely a good idea to do so. As
profits begin to accumulate, however, the structure of the company
quite often isn't amended to reflect this growth. Effective
corporate structures change with the growth of the corporation and
can provide a multitude of benefits. One of the easiest and most
beneficial ways of facilitating some of those benefits is by adding
one or more holding companies to the structure of the business,
granting the business owners increased risk minimization, wealth
protection and tax minimization. Ultimately, these strategies keep
more money in the pockets of the owners of the business.
