Deciding a Business structure is important to when you consider the raising funds later on. Every business needs capital to function smoothly. The need for capital depends on the nature of the business. Initially, the promoters invest money in their business but gradually it demands more capital. The need for raising funds arises with the growth of the business. Hence one must start with a business structure which is suitable for raising funds.
External funds can be raised in two ways – equity funding and debt funding. Equity funding means raising money by issuing shares through private limited company registration, while debt funding involves raising funds by borrowing money.