Choosing the right business structure,or legal formatio, for your business.
When you start a business, you need to determine what kind of legal structure your business will have. The legal structure will determine how you pay taxes, what your legal liabilities are, and more. The most common business structures are:
Sole Proprietor – the individual is the single owner of the business and therefore accountable for all company’s debts or liabilities.
LLC – whereby the members of the company cannot be held personally liable for the company’s debts or liabilities.
S Corp – Pass-through taxation gives the major difference from an LLC, the S Corp must file a business tax return.
C Corp – Separate taxation. Limit the personal liability of individuals involved in the corporation. Ownership belongs to the board and will run when original owners are replaced.
There are more options and pros & cons for each. Get further discussion on business structure at the link below.