Structure your Business Well to Enhance the Profits and Performance

Rishabh Sharma
Rishabh Sharma Feb 22 2021 - 3 min read
Structure your Business Well to Enhance the Profits and Performance
Business structuring refers to the legal structure of a business that is recognized in a given jurisdiction. An organization’s legal structure is a key determinant of the activities that it can undertake. Read on to know more.

Business structures and agreements have a huge impact on taxation, ownership control, the transfer of gifts and estates, and shareholder access to cash flow. A business owner's ability to understand these areas directly influences their capacity to consider possible issues, comprehend compatible business structures, and develop proper documentation to help succession goals. Also that business structuring likewise enormously affects family harmony in the business. 

Different Opinions:

Business structures protect the business owners in order to help them to achieve desired results with any partners, included family, and key managers. The purpose behind having appropriate business structures in place is, they help in driving business success and longevity, avoid disagreements or differences of opinion because everyone has an opinion on how you should run your business. Securing your goals and not those of everyone around you with creating formal compensation and incentives.

Another valuable apparatus as a part of safeguarding you have your plans in place is that they work to motivate and retain your key managers. In particular, when looking at employment and/or golden hand-cuff agreements, they can give you certainty your key managers completely understand their job and responsibilities, and the incentive compensation planned to promote their career commitment. And in exceptionally competitive markets like the multi-unit franchise section, they can likewise provide a layer of protection with non-content covenants. 

Areas of Business Structure: 

All of us often hear from multi-unit franchise owners who've not occupied with this process after there has been a circumstance creating conflict. Their reasoning for not doing so was either because it seemed to be non-relevant or complex. Actually, it is one of the more basic areas to ensure the future of your business. Consider these 5 areas of the business structure checklist before beginning: 

1. Evaluate your present business structure and business document circumstances comparative with your confirmed goals. Evaluate the business taxes you are subject to and identify if there may be any adjustments to minimize them. 

2. Consult your legal advisor team to assist with business structuring:

  • Contracted expert subject matter facilitator such as a Succession Planner
  • Business attorney and accountant
  • Family members
  • Key managers

3. Discuss business structuring goals and issues with your advisor team. Add a business structuring section to your succession plan. This gives a prioritized foundation for action and direction of categorized activities including updates on: 

  • Stockholder documents
  • Lease review and refinements
  • Key manager/family member documents
  • Corporate structure
  • Corporate minutes
  • Corporate documents, including franchisor documentation
  • Operating covenants

4. Schedule regular meetings with the legal advisor team as a drill in order to establish responsibilities. 


Business structuring deals with the mechanical part of how you operate your business. They are put in place to provide structure and trust in anticipated business worth and ownership rights. It's imperative to include stockholder, operating, and partnership agreements, and ensuring they are suitably imparted and coordinated all through your key stakeholder, relative, and management team.


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