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When starting out, it is important to determine what form of business structure will work best for your specific situation. Choosing the best legal structure for your business requires knowledge of your line of work and understanding of local state and federal laws. The legal structure you choose for your business is one of the most important decisions you will make in your startup process. Your choice of structure can greatly affect the way you run your business, impacting everything from liability and taxes to control over the company. Choosing the right business entity allows an entrepreneur to reduce liability exposure, minimize taxes, and ensure that the business can be financed and run efficiently. It also provides business owners with a mechanism for ensuring that the business operations will continue, rather than be automatically terminated, upon the death of an owner.

When choosing a business entity, you should consider the following:

 Are your personal assets at risk from liabilities arising from your business?

 Are you able to offer ownership to key personnel?

 What are the continued costs of operating and maintaining your business?

Here is a list of the most commonly used legal structures for business and the advantages and disadvantages of each one is explained in detail below.

Common Legal Entities:

 Sole Proprietorship

 Partnership

 Limited Liability Company – including: Series LLC

 Corporation – including:C CorporationS CorporationClose CorporationBenefit CorporationProfessional CorporationNonprofit Corporation