Jump to Main Content
USA flagAn Official Website of the United States Government

Incorporating Your Business

<p>
When you&rsquo;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&rsquo;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&rsquo;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.</p>
<p>
Here is a list of the most common ways to structure a business.</p>

A limited liability company is a hybrid type of legal structure that provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership.

The "owners" of an LLC are referred to as "members." Depending on the state, the members can consist of a single individual (one owner), two or more individuals, corporations or other LLCs.

Corporation (C Corporation)

A corporation (sometimes referred to as a C corporation) is an independent legal entity owned by shareholders. This means that the corporation itself, not the shareholders that own it, is held legally liable for the actions and debts the business incurs.

Corporations are more complex than other business structures because they tend to have costly administrative fees and complex tax and legal requirements. Because of these issues, corporations are generally suggested for established, larger companies with multiple employees.

Pages

Subscribe to RSS - Incorporating Your Business