Choosing a Business Entity

Starting a business requires a lot of research and decision-making. One of these decisions will be how your business is classified—in other words, which type of business entity you choose to become. Choosing the structure for your company is one of the biggest factors that will affect how your company operates, and should not be entered into lightly. You should consider taxes, recordkeeping and the liability you are willing to take on when choosing among business entities.

Businesses can be categorized in several different ways. Each type has different benefits, characteristics and tax implications. The most common business classifications are:

  • Sole proprietorships
  • Partnerships
  • LLCs
  • C corporations
  • S corporations

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