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When you’re starting a business, one of the first decisions you have to make is the type of business you want to create. A sole proprietorship? A corporation? A limited liability company? This decision is important, because the type of business you create determines the types of applications you’ll need to submit. You should also research liability implications for personal investments you make into your business, as well as the taxes you will need to pay. It’s important to understand each business type and select the one that is best suited for your situation and objectives. Keep in mind that you may need to contact several federal agencies, as well as your state business entity registration office.
Here is a list of the most common ways to structure a business.
People form cooperatives to meet a collective need or to provide a service that benefits all member-owners. Learn more about how cooperatives are structured.
- A corporation is more complex and generally suggested for larger, established companies with multiple employees. Learn more about how Corporations are structured.
An LLC is designed to provide the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership. Learn more about how LLCs are structured.
There are several different types of partnerships, which depend on the nature of the arrangement and partner responsibility for the business. Learn more about how these are structured.
An S corporation is similar to a C corporation but you are taxed only on the personal level. Learn more about how S corporations are structure.
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