Starting your small business
1. CORPORATION
2. Limited Liability Corp. (LLC)
2. Limited Liability Corp. (LLC)
- A legal entity separate from its owners.
- Can make a profit, be taxed, and be held legally liable.
- Offers the strongest protection to its owners from personal liability, but the cost to form it is higher than other structures.
- Requires extensive record-keeping, operational processes, and reporting.
2. Limited Liability Corp. (LLC)
2. Limited Liability Corp. (LLC)
2. Limited Liability Corp. (LLC)
- Takes advantage of the benefits of both the corporation and partnership business structures.
- Protects your assets from liability — like your vehicle, house, and savings accounts.
3. Partnership
2. Limited Liability Corp. (LLC)
4. SOLE PROPRIETORSHIP
- Limited partnerships have only one general partner with unlimited liability. All other partners have limited liability.
- Profits are passed through to personal tax returns.
- Limited liability partnerships give limited liability to every owner.
4. SOLE PROPRIETORSHIP
2. Limited Liability Corp. (LLC)
4. SOLE PROPRIETORSHIP
- Gives you complete control of your business.
- Do not produce a separate business entity. You can be held personally liable for the debts and obligations of the business.
- Banks are hesitant to lend to sole proprietorships.
- Sole proprietorships can be a good choice for low-risk businesses and owners who want to test their business idea before forming a more formal business.