Business Financing FAQ

Questions:

• How can I raise money for my business?
• What are the main differences between borrowing money and selling ownership interests in my business?
• How do business loans work?
• If I borrow money, what are my repayment options?
• How do I sell ownership interests in my business?

Answer:

How do I sell ownership interests in my business?

If you're going to raise money by taking in co-owners, the first thing you'll need to decide is whether to structure your business as a general partnership, a corporation, a limited liability company, or a limited partnership. There are advantages and disadvantages to each of these types of business organizations, so be sure to research your choice thoroughly.

In addition, depending on how many investors you take in and how much money you raise, you may need to comply with federal and state securities laws.

To learn more about these issues, read Raising Money Through Equity Investments.

For More Information

Nolo's The Small Business Start-Up Kit: A Step-by-Step Legal Guide, by Peri Pakroo (Nolo), is a user-friendly guide that shows you how to launch a business quickly, easily and with confidence.