Which Business Entity Is Right For You?
This section is designed to help you learn about the different kinds of business entities available. It will define and illustrate the advantages and disadvantages of sole proprietorships, partnerships, LLCs and corporations. Keep in mind that these are general overviews. When it comes time for you to decide the exact business entity you need, contact Mr. Inc. for a FREE consultation.
C Corporation
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Owners live outside the country
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Owners live in a state with a state income tax
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If several individuals or other entities are involved in ownership.
S Corporation
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Companies expecting start-up losses during the initial years of operation.
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Companies with no intent of going public in the future.
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Companies that do not expect to issue multiple classes of stock.
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Companies that might be subject to the Alternative Minimum Tax.
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Owners live in a state with no personal state income tax.
LLC (limited liability company)
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When the business is a partnership
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When real estate is owned for investment purposes
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When several entities own the business
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When the owner is seeking complete protection from personal liability
What to choose?
The best entity for building business credit for your company is one that will:
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Separate you from your business
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Have its own federal tax identification number
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Separate your company’s business debt from owners/officers