2. What kind of investors is the company seeking?

When deciding what business form to choose, a business should consider its financing needs.  Investors can come from many different areas -- friends and family, individuals involved in the business, the business's suppliers or partner companies, venture capitalists, and others.  Each type of investor has similar desires.  For example, none of them want to be liable for the business's debt should the venture fail.  However, they also have very different needs. 

A partner company that is financing a venture which will be key to its own success may want some control over the business's management.  An individual working for the company may want to share the profits, but may not wish to be directly involved in the headaches of management.  The business also may wish the management help of a successful and more experienced company, or it may want to limit control of its management to a few key individuals.  Some business entities may even be limited by law as to who can own their shares; for example, a professional corporation's shares may only be owned by individuals licensed to provide its type of professional services.

Partnerships and LLCs are financed with contributions and loans from partners (or members) and others.  Corporations can issue stock to shareholders and raise money through bonds and other debt instruments.