The type of legal business structure you choose will depend on several factors and influence things like Liability, Taxation, Payroll, and Record Keeping. The key is to find the best fit for your organization’s current and future goals. It can prove difficult to move backwards in the event that you need to change your business structure once you’ve registered your organization, so be sure to give it some serious thought.
A one-person business owner.
A business structure allowed by state statute that offers owners limited personal liability for the debts and actions of the company.
Is a closely held corporation by the Internal Revenue Code of the United States federal income tax, where in the corporation is not taxed but the income or losses are distributed to the shareholders who are taxed personally.
A corporation that, under US income tax law, is taxed separately from its owners.
Two or more people forming a business. In the more advanced view you will see that there are two types of partners, general and limited and you should know what the difference is.
If your business goal is more focused on impact than on profit, this might be the right structure for you.
Get Down To Business
There is more than one way to officially set up a business. We are here to make sense of them all so you can start on the right path or scale to the next level. We will check if your company name is available, and file all the required forms. Together, let’s make your business official.
Both protect owners so they’re not personally on the hook for business liabilities or debts. But, key differences include how they’re owned (LLCs have one or more individual owners and corporations have shareholders) and maintained (corporations generally have more formal record-keeping and reporting requirements). Even though LLCs are considered easier to start and maintain, investors tend to prefer corporations.
LLCs, S corporations, and sole proprietorships are taxed once on profits received. C corporations are taxed twice; the business pays taxes at the corporate level, and shareholders pay taxes on income received.
The way you’re taxed. C corporation income is taxed twice—the business pays taxes on its net income, and then the shareholders also pay taxes on the profits they receive. With S corporation income, only the shareholders pay taxes on profits received.
LLCs and corporations. You don’t get personal liability protection with sole proprietorships or DBAs.
Personal liability protection. An LLC protects owners from being personally on the hook for business liabilities or debts. A sole proprietorship doesn’t.
