What the legal status determines
The status is not a formality: it shapes several major aspects of your activity:
- Liability: limited to the capital (companies) or engaging your personal assets in some cases.
- Taxation: income or corporate tax, depending on the country and form.
- Social contributions and the director's protection.
- Governance: alone or with others, decision rules, bringing in partners or investors.
- Credibility with banks, customers and partners.
A poor status choice can be costly to correct: better to be informed from the start.