Weigh the pros and cons of incorporation

Generally, preferred shares provide its shareholders preferential payments of distribution of assets or dividends, in case the company shuts down its operations. A lot of small business owners only allow shares of common stock. This is the most complex of all the business structures, but it offers the strongest personal liability protection to its owners. Because a c corporation is the most complex—and most expensive to maintain—this is usually the business structure option for companies most concerned with liability, or for those that expect to raise capital.