Here are the main types of business structures:
Sole Proprietorship
This is simple to start, and you have full control. But you're personally responsible for everything. It's not great for raising money or getting loans.
This is simple to start, and you have full control. But you're personally responsible for everything. It's not great for raising money or getting loans.
Partnership
If you have a partner, you can start a partnership. There are limited partnerships (LP) where one person has more risk, and limited liability partnerships (LLP) where everyone has some protection.
If you have a partner, you can start a partnership. There are limited partnerships (LP) where one person has more risk, and limited liability partnerships (LLP) where everyone has some protection.
Limited Liability Company (LLC)
This gives you some protection from being personally responsible for business debts. Your profits and losses go through your personal taxes. It's good if you want some protection but still have flexibility.
This gives you some protection from being personally responsible for business debts. Your profits and losses go through your personal taxes. It's good if you want some protection but still have flexibility.
Corporation (C Corp)
This is a separate entity from you, so you have more protection from debts. But it's more complicated and has more taxes. It's good for bigger businesses planning to sell stocks.
This is a separate entity from you, so you have more protection from debts. But it's more complicated and has more taxes. It's good for bigger businesses planning to sell stocks.
S Corporation (S Corp)
This lets your profits and losses go through your personal taxes, so you don't pay taxes twice. It's limited to 100 shareholders, and they must be U.S. citizens.
This lets your profits and losses go through your personal taxes, so you don't pay taxes twice. It's limited to 100 shareholders, and they must be U.S. citizens.
Benefit Corporation (B Corp)
This is like a regular business, but it also does something good for society or the environment. Some states need a report about the good things you're doing.
This is like a regular business, but it also does something good for society or the environment. Some states need a report about the good things you're doing.
Nonprofit Corporation
This is for charities or groups that help others. You can be tax-exempt, but you need to follow special rules.
This is for charities or groups that help others. You can be tax-exempt, but you need to follow special rules.
Cooperative:
This is owned and run by the people who use it. The profits go to the members.
This is owned and run by the people who use it. The profits go to the members.
