Yes, there is!
Don’t look so surprised, some questions are easy to answer! If you want to learn how I know this, keep reading.
Although it may seem that there are a lot of options to choose from when you have an idea, there really aren’t. The suitable legal form depends not only on WHAT you want to do, but also on HOW you want to do it. And just because you have the option to register a limited liability company (Austrian GmbH), does not mean you should do it. If WHAT you do is copywriting, for example, and HOW you do it is getting short-term gigs on Upwork or Fiverr, a limited liability company is a waste of money.
And that is not only true when it comes to starting a business but also, when your idea has a social impact and/or making a profit out of it is not the goal.
When a client tells me “I don’t know which form to choose, there are so many”, I ask them a few important questions. They are aimed at the “WHAT”, “HOW” but also “HO at the “HOW LONG” of the idea.
Some of these questions are:
- “Do you have a co-founder?”
- “Do you want to turn a profit?”
- “Do you have starting capital?”
- “Will you conduct high-risk and/or high-cost operations?”
- “How long are you planning on doing that?”
- “What is your goal?”
Every answer brings us closer to the right legal form. To show you what I mean and how these questions work, I have prepared a graphic for you.