Determine how many people are involved in the ownership of the business. If the only owner is going to be you, then you can go with a sole proprietorship, which makes you solely liable for the business and its taxes. If you are a co-owner, you may need to look at partnerships or corporations.

Analyze the potential size of your business. If you want to maintain a small, community-oriented service business, you might want to stick to the more simple forms of ownership, such as a sole proprietorship or general partnership.

Decide if the business is for profit or not for profit. If your business is being started for charitable, educational, literary, or scientific purposes, you'll need to go into a nonprofit status. If the business is here to make a profit, it will be a for-profit structure.

Determine how much liability you want to have. Some business structures, such as sole proprietorships or general partnerships, leave you or your general partners solely liable for claims against the business. In other words, if someone sues the business, they are, in effect, suing you directly. Other types of business entities, such as limited partnerships and corporations, make the business liable instead of its partners or owners.

Consider your desired tax liability. Sole proprietorships and general partnerships allow individual owners to be taxed based on income and expenses. But a corporate structure or limited partnership creates a tax liability for the business itself instead of the individual owners.

Consult with an expert, such as an attorney or an accountant. These professionals will help you clarify your research, make clear determinations of taxes and liabilities, and will also be able to help you complete the proper registration and licensing procedures.